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Full text of "North Carolina Register v.3 no. 15 (11/1/1988)"

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The 
NORTH CAROLINA 

REGISTER 



IN THIS ISSUE 



CORRECTION 



FINAL DECISION LETTER 



RECEfVERf 

NOV 3 1968 




PROPOSED RULES 

Agriculture 

Cultural Resources 

Dental Examiners 

Insurance 

N.C. Board of Nursing 

NRCD 

FINAL RULES 

Revenue 
Transportation 

ISSUE DATE: NOVEMBER 1, 1988 

Volume 3 • Issue 15 • Pages 687-728 



INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATIVE CODE 



NORTH CAROLINA REGISTER 

The North Carolina Register is published bi-monthly 
and contains information relating to agency, executive, 
legislative and judicial actions required by or affecting 
Chapter 150B of the General Statutes. All proposed, ad- 
ministrative rules and amendments filed under Chapter 
150B must be published in the Register. The Register 
will topically comprise approximately fifty pages per 
issue of legal text. 

State law requires that a copy of each issue be pro- 
vided free of charge to each county in the state and to 
\arious state officials and institutions. The North 
Carolina Register is available by yearly subscription at 
a cost of ninety-five dollars ($95.00) for 24 issues. 

Requests for subscriptions to the North Carolina 
Register should be directed to the Office of Ad- 
ministrative Hearings, P. O. Drawer 11666, Raleigh, N. 
C. 27604, Attn: Subscriptions. 

ADOPTION, AMENDMENT, AND REPEAL OF 
RULES 

An agency intending to adopt, amend, or repeal a rule 
must first publish notice of the proposed action in the 
North Carolina Register. The notice must include the 
time and place of the public hearing; a statement of how 
public comments may be submitted to the agency either 
at the hearing or otherwise; the text of the proposed 
rule or amendment; a reference to the Statutory 
Authority for the action and the proposed effective date. 

The Director of the Office of Administrative Hearings 
has authority to publish a summary, rather than the 
full text, of any amendment which is considered to be 
too lengthy. In such case, the full text of the rule con- 
taining the proposed amendment will be available for 
public inspection at the Rules Division of the Office of 
Administrative Hearings and at the office of the pro- 
mulgating agency. 

Unless a specific statute provides otherwise, at least 
30 days must elapse following publication of the pro- 
posal in the North Carolina Register before the agency 
may conduct the required public hearing and take ac- 
tion on the proposed adoption, amendment or repeal. 

When final action is taken, the promulgating agency 
must file any adopted or amended rule for approval by 
the Administrative Rules Re\'iew Commission. Upon ap- 
proval of ARRC, the adopted or amended rule must be 
filed with the Office of Administrati\'e Hearings. If it 
differs substantially from the proposed form published 
as part of the public notice, upon request by the agen- 
cy, the adopted version will again be published in the 
North Carolina Register. 

A rule, or amended rule cannot become effective 
earlier than the first day of the second calendar month 
after the adoption is filed with the Office of Ad- 
ministrative Hearings for publication in the NCAC. 

Proposed action on rules may be withdrawn by the 
promulgating agency at any time before final action is 
taken by the agency. 

TEMPORARY RULES 

Under certain conditions of an emergency nature, 
some agencies may issue temporary rules. A temporary 
rule becomes effective when adopted and remains in 



effect for the period specified in the rule or 180 days,^ 
whichever is less. An agency adopting a temporary ruleJ 
must begin normal rule-making procedures on the per-' 
manent rule at the same time the temporary rule is 
adopted. 

NORTH CAROLINA ADMINISTRATIVE CODE 

The North Carolina Administrative Code (NCAC) is 
a compilation and index of the administrative rules of 
25 state agencies and 38 occupational licensing boards. 
The NCAC comprises approximately 15,000 letter size, 
single spaced pages of material of which approximate- 
ly 35% is changed annually. Compilation and publica- 
tion of the NCAC is mandated by G.S. 150B-63(b). 

The Code is divided into Titles and Chapters. Each 
state agency is assigned a separate title which is fur- 
ther broken down by chapters. Title 21 is designated 
for occupational licensing boards. 

The NCAC is available in two formats. 

(1) Single pages may be obtained at a minimum 
cost of two dollars and 50 cents ($2.50) for 10 
pages or less, plus fifteen cents ($0.15) per each 
additional page. 

(2) The full publication consists of 52 volumes, 
totaling in excess of 15,000 pages. It is sup- 
plemented monthly with replacement pages. A 
one year subscription to the full publication in- 
cluding supplements can be purchased for 
seven hundred and fifty dollars ($750.00). In- 
dividual volumes may also be purchased with 
supplement service. Renewal subscriptions for 
supplements to the initial publication available. 

Requests for pages of rules or volumes of the NCAC 
should be directed to the Office of Administrative 
Hearings. 

NOTE 

The foregoing is a generalized statement of the pro- 
cedures to be followed. For specific statutory language,' 
it is suggested that Articles 2 and 5 of Chapter 150B of 
the General Statutes be examined carefully. 

CITATION TO THE NORTH CAROLINA 
REGISTER 

The North Carolina Register \s cited by volume, issue, 
page number and date. 1:1 NCR 101-201, April 1, 1986 

refers to Volume 1, Issue 1, pages 101 through 201 of 
the North Carolina Register issued on April 1, 1986 



North Carolina Register. Published bi-monthly by 
the Office of Administrative Hearings, P.O. 
Drawer 1 1666, Raleigh, North Carolina 27604, pur- 
suant to Chapter 150B of the General Statutes. 
Subscriptions ninety-five dollars ($95.00) per year. 
North Carolina Administrative Code. Published 
in looseleaf notebooks with supplement ser\'ice by 
the Office of Administrative Hearings, P.O. 
Drawer 1 1666, Raleigh, North Carolina 27604, pur- 
suant to Chapter 150B of the General Satutes. 
Subscriptions seven hundred and fifty dollars 
($750.00). Individual volumes a\'ailable. 



NORTH 
CAROLINA 
REGISTER 




II 



ISSUE CONTENTS 



CORRECTION 
NRCD 

N.C. Environmental Management 
Commission 687 



FINAL DECISION LETTER 

Voting Rights Act 688 



Office of Administrative Hearings 

P. O. Drawer 11666 

Raleigh, NC 27604 

(9l'9) 733 - 2678 



Robert A. Melott, 

Director 
James R. Scarcella Sr., 

Deputy Director 
Molly Masich, 

Director A PA Services 



Staff: 

Ruby Occch, 

Publications Coordinator 
Teresa Kilpatrick, 

Editorial Assistant 
Jean Shirley, 

Editorial Assistant 



III. PROPOSED RULES 
Agriculture 

N.C. Gasoline and 

Oil Inspection Board 689 

Cultural Resources 
Division of Archives 

and History 691 

Insurance 

Consumer Services 691 

Licensing Boards 

Dental Examiners 704 

N.C. Board of Nursing 707 

NRCD 

Coastal Management 703 

Environmental Management.... 698 



IV. FINAL RULES 
Revenue 

Individual Income Tax 710 

Transportation 

Division of Highways 719 

Division of Motor Vehicles 720 

V. CUMULATIVE INDEX 725 



NORTH CAROLINA REGISTER 

Publication Deadlines and Schedules 

(September 1988 - March 1989) 



Issue 


Last Day 


Last Day 


Earliest 


♦ 


Date 


for 


for 


Date for 


Earliest 




Filing 


Electronic 


Public 


Effective 






Filing 


Hearing & 
Adoption by 
Agency 


Date 


++*+++++ 


++++++*♦ 


++++♦+++ 


+++++♦+♦ 


♦♦+♦♦++< 


09/01/88 


08/11,88 


08/18/88 


10/01/88 


01/01/89 


09/15/88 


08/26/88 


09/02/88 


10/15/88 


01/01/89 


10/03/88 


09/12/88 


09/19/88 


11/02/88 


02/01/89 


10/14/88 


09/26/88 


10/03/88 


11/13/88 


02/01/89 


11/01/88 


10/11/88 


10/18/88 


12/01/88 


03/01/89 


11/15/88 


10/26/88 


11,02/88 


12/15/88 


03/01/89 


12/01/88 


11/07/88 


11/15/88 


12/31/88 


04/01/89 


12/15/88 


11 '23/88 


12/02/88 


01/14/89 


04/01/89 


01/02/89 


12/08/88 


12/15/88 


02/01/89 


05/01/89 


01/16/89 


12/27/88 


01/03/89 


02/15/89 


05/01/89 


02/01/89 


01/10/89 


01/17/89 


03/03/89 


06/01/89 


02/15/89 


01/26/89 


02/02/89 


03/17/89 


06/01/89 


03/01/89 


02/08/89 


02/15/89 


03/31/89 


07/01/89 


03/15/89 


02/21/89 


03/02/89 


04/14/89 


07/01/89 



* The "Earliest Effecth'e Date" is computed assuming that the public hearing 
and adoption occur in the calendar month immediately following the "Issue 
Date", that the agency files the rule with The Administrative Rules Review 
Commission by the 20th of the same calendar month and that ARRC approves 
the rule at the next calendar month meeting. 



CORRECTION 



CORRECTION TO NOTICE AS PUBLISHED IN THE NORTH CAROLINA REGISTER AT 
3:14 NCR 656 SHOULD READ: 

TITLE 15 DEPARTMENT OF NATURAL RESOURCES AND COMMUNITY 

DEVELOPMENT 

lyotice is hereby gh'en in accordance with G.S. I SOB- 1 2 that the N. C. Environmental Management 
Commission intends to amend nde(s) cited as 15 NCAC 2J .0002. 

1 he proposed effective date of this action is March 1 , 1989. 

1 he public hearing will be conducted at 10:00 a.m. on November 21 , 1988 at Ground Floor Hearing 
Room, Archdale Bldg., 512 N. Salisbury Street, Raleigh, North Carolina. 

O ommenl Procedures: Any person interested in this matter is irn-ited to attend. Comments, statements, 
data, and other information may be submitted in writing prior to, during, or within ten days after the 
hearing or may be presented orally at the hearing. Oral statements may be limited at the discretion of 
the hearing officer. For more information and copies of the proposed rule, please contact Mr. Paul 
Wilms, Director, Division of Environmental Management, P. O. Box 27687, Raleigh, NC 27611, (919) 
733-7015. 



NOR TH CAROLINA REGIS TER 687 



VOTING RIGHTS ACT FINAL DECISION LETTER 



[G.S. J2Q-30.9H, effeclh'e July 16, 1986, requires that all letters and other documents issued by the 
Attorney General of the United States in which a final decision is made concerning a "change af- 
fecting voting" under Section 5 of the Voting Rights Act of 1965 be published in the North Carolina 
Register. / 



U.S Department of Justice 
Civil Rights Division 

\VBR:MAP;CM:rac 

DJ 166-012-3 Voting Section 

W4626 P.O. Box 66128 

Washington, D.C. 20035-6128 

October 4, 1988 



Robert C. Cogswell, Jr., Esq. 

City Attomev 

P. O. Box L^'l3 

Fayetteville, North Carolina 28302-1513 

Dear Mr. C\igswell: 

This refers to the increased compensation for elected officials for the City of Fayetteville in 
Cumberkmd County, North Carolina, submitted to the Attorney General pursuant to Section 5 of the 
Votmg Riiilits Act of 1965, as amended, 42 U.S.C. 1973c. We received your submission on August 
5, 1988. 

The Attorney General does not interpose any objection to the change in question. However, we 
feel a responsibihty to point out that Section 5 of the Voting Rights Act expressly provides that the 
failure of the Attorney General to object does not bar any subsequent judicial action to enjoin the 
enforcement of such change. See the Procedures for the Administration of Section 5 (28 C.F.R. 51.41). 

Sincerely, 

Wm. Bradford Reynolds 
Assistant Attorney General 
Civil Rights Division 

By: 



Gerald W. Jones 
Chief, Voting Section 



6S8 NORTH CAROLINA REGISTER 



PROPOSED RULES 



TI ILK 2 - DEPARTMENT OF 
AGRICULTURE 



J\ otice is herebv given in accordance with G.S. 

1 SOB- 1 2 that the N. C. Gasoline and Oil In- 
spection Board intends to amend rule (s J cited as 

2 NCAC 42 .0/02, .0201. and .0504. 

1 he proposed effective date of this action is 
March I, I9S9. 

1 he public hearing will be conducted at 10:00 
a.m. on December 2, 1988 at Board Room, Agri- 
culture Bldg.. I W. Edenton St.. Raleigh, N.C. 



Co 



_- ommcnl Procedures: Interested persons may 
present statements either orally or in writing at the 
public hearing or in writing prior to the hearing 
by mail addressed to N. David Smith, Secretary 
of the \orth Carolina Gasoline and Oil Inspection 
Board. P.O. Box 27647, Raleigh, Sorth Carolina 
27611. 

CHAPTER 42 - N. C. GASOLINE AMI OIL 
INSF'ECTION BOARD 

SECTION .0100 - PLRPOSE AND DEFINITIONS 

.0102 DEFINITIONS 

Except as otherwise defined in Chapter 119, 
North Carolina General Statutes, the definitions 
applicable in this Chapter are as follows: 
(2) "jVnhydrouo donaturod i^ thyl uloohol 
(othunol)" mt ' ang i nominal ^W pro of ethanol 
te which b*j bcon added » maKimum »f frve 
volumes ef approved donaturant(o) to 4-00 
volumoo &f e thanol aft4 containing fte*- moro 
than 4-r3^ percent wator hf wcitjit a* deter 
H«ft^ ]fff ASTM ¥e**' Method C 30,1. 
"Denatured fuel ethanol" means ethanol 
meeting the provisions of ASTM D-4806, 
"Standard Specifications for Denatured I'uel 
Fthanol to be Blended with (lasolines for 
Use as an Automotive Spark- Ignition En- 
gine Fuel." 
(9) "Leaded" means any gasoline or 

gasoUne oxygenate blend which contains not 
less than 0.05 grams lead per U.S. gallon 
(0.013 grams lead per liter). 
( 16) "Regular" when used as part of a brand 
name and or as a grade desi.gnation for gas- 
oline or gasoline ox\genate blend shall be 
construed to mean a leaded regular grade 
commercial automotive gasoline or 
gasc^line oxygenate blend unless the brand 
name and or grade desi.gnation also contams 



the word "Unleaded" or a word or term of 
equivalent meaning. 
(19) "Linleaded" means any gasoline or blond 
ef gaoolino witl* oxygenates as defined ttt tkk 
Chapter containing gasoline/oxygenate 
blend to which no lead or phosphorus 
compounds have been intentionally added 
and which contains not more than 0.05 
grams lead per U.S. gallon (0.013 grams lead 
per liter) and not more than 0.005 
phosphorus per U.S. gallon (0.0013 grams 
phosphorous per liter). 

Statutory Authority G.S. 119-26. 

SECTION .0200 - QUALITY OF LIQLID FLEL 
PRODUCTS 

.0201 STANDARD SPECIFICATIONS 

(a) Gasoline sbaii conform to ASTM 
D ' 139 85a, The board hereby adopts by refer- 
ence in accordance with G.S. 150B-14c, AST.M 
D-4814. "Standard Specification for Automotive 
Gasoline. Spark- Ignition Engine Fuel" as stand- 
ard specification for gasoline with the following 
modifications: 

(1) Applications for temporary exceptions to 
vapor pressure and vapor/liquid ratio 
specifications as provided in this Subpar- 
agraph may be made to the director. Said 
applications shall contain evidence satis- 
factory to the director that outlets mar- 
keting gasoline in North Carolina carmot 
feasibly be supplied from bulk terminals 
furnishing specified volatility level gasoline 
or that customary sources of supply have 
been temporarily interrupted by product 
shortage and alternate sources furnishing 
specified volatility level gasoline are not 
available. Such temporary exceptions 
granted shall apply only until the next 
meeting of the board at which time the 
board shall establish the duration of the 
exception; 

(2) Octane rating shall not be less than the 
octane index certified on the brand name 
registration as required by 2 NCAC 42 
.0500; 

(3) Reid vapor pressure and vapor/liquid ratio 
seasonal specifications as listed in this 
Subparagraph may be extended for a 
maximum period of 15 days to allow for 
the disbursement of old stocks. However, 
new stocks of a higher volatility classi- 
fication shall not be offered for retail sale 
prior to the effective date of the higher 
volatility classification. 



NORTH CAROLISA REGISTER 



689 



PROPOSED RULES 



(b) Ganolino oxvgonate blonds ohall conform te- 
ASTM D '1 JQ S5"a^ The board hereby adopts by 
referencL' in accordance with G.S. 15QB-14c, 
ASrVt n-4S14, "Standard Specification for Au- 
tomotive GaGoIino, Spark-Igiition Engine Fuel" 
as standard specification for gasoline/oxygenate 
blends with the following modifications: 

(1) A vapor pressure tolerance not exceeding 
one pound per square inch may be al- 
lowed for gasohol, leaded gasohol, and 
gasoline-oxygenate blends; as dotorminod 
b¥ *4** ambient tomporuturo procoduro, 
a'STM D 32J 79; 
f3) Vapor liquid ratio cpocificationo fof 
gu !. ohol, lead e d gaoohol, aR4 gaoolino 
oxygcnuto blcndo Vi411- b<* ' . ' ■■ ai' i od ponding 
do* , olopmont ef appropriate k»s* mothodo 
by i\STM afi4 oubooquont adoption by 
Ae board; 
f^ (2} Reid \apor pressure and vapor/Uquid 
ratio seasonal specifications as listed in 
this Subparagraph may be extended for a 
maximum period of 15 days to allow for 
the disbursement of old stocks. However, 
new stocks of a higher volatility classi- 
fication shall not be offered for retail sale 
prior to the effective date of the higher 
\olatLlity classification; 
(4^ t^ Applications for temporary exceptions 
to vapor pressure and vapor/liquid ratio 
specifications as provided in this Subpar- 
agraph may be made to the director. Said 
apphcations shall contain evidence satis- 
factory to the director that outlets mar- 
keting gasoline in North Carolina cannot 
feasibly be supplied from bulk terminals 
furnishing specified volatility level gasoline 
or that customary sources of supply have 
been temporarily interrupted by product 
shortage and alternate sources furnishing 
specified volatility level gasoline are not 
available. Such temporary exceptions 
granted shall apply only until the next 
meeting of the board at which time the 
board shall establish the duration of the 
exception; 
{Pf (4| Distillation Rango (ASTM G-^ sb^ 
h% tfee oamo as opocifiod fof gaoohno ift fa) 
»f this Rulo oxoopt ^Pi» The minimum 
temperature at 50 percent evaporated shall 
be 158 degrees F. (70 degrees C.) as de- 
termined bv ASTM Test Method D-86; 
f4) {2X Octane rating shall not be less than the 
octane index certified on the brand name 
registration as required hv 2 NCAC 42 
.0500; 
f?) (6} Oxygenate Content. Gas liquid 
chromatocraphio procoduroo wiU b« con 



oidorod a* official fef tfee d e termination ef 
oxygenato oontont. 

(A) Gasohol and leaded gasohol shall con- 
tain 10 plus/minus 0.5 volume percent 
anhydrouG denatured fuel ethanol. 

(B) Gasoline-oxygenate blends not other- 
wise defmed in this Chapter, may contain, 
maximum or minimum as appropriate, 
the percentage and type of oxygenates as 
certified on the brand name registration 
as required by 2 NCAC 42 .0500, subject 
to compliance with other specifications as 
provided in this Subparagraph; 

{^ (7} Water tolerance shall be such that no 
phase separation occurs when subjected 
to a temperature equal to the lowoot ejt- 
poctod ambiont tomporaturo baood eft 
seasonal volatility clasi i ilicationo as opooi 
Iw4 ift ASTM D 130 85a temperatures 
specified in Table 4, ASTM D-4814. 

(c) DiecKjl motor fo#i shall conform te ASTM 
D 975 8 1 , The board hereby adopts bv reference 
in accordance with G.S. 150B-l-tc, ASTM 
D-975, "Standard Specification for Diesel Fuel 
Oils" as standard specification for diesel motor 
fuels with the foUowing modifications: moditi- 
cation: fof For diesel motor fuel number grade 
2-D, a the minimum flash point as determined 
bx f ASTM Tesl Method D-56 ) »f shall be 1 15 
degrees F. (46 degrees C). 

(d) P«^ ©4 sbaU conform to ASTM D 396 81, 
The board hereby adopts by reference in accord- 
ance with G.S. 150B-14c, ASTM D-396, 



"Standard Specification for Fuel Oil" as standard 
specification for fuel oils. 

(e) Koroseno shall conform te The board hereby 
adopts by reference in accordance with G.S. 
150B-14C, ASTM D-3699, "Standard Specifica- 
tion for Kerosene" as standard specification for 
kerosenes with the following specifications: 
modification: For grade 2-K, the presence or 
absence of coloring matter shall in no -way be 
determinative of whether a substance meets the 
requirements of this grade of kerosene. 
(44 t>ieT 1 K. A special 
kerosene suitabl e fof 



le¥^ 



sulfur grade 
Hse ift nonflue 
connect e d korosono burner appUoncos afi4 
f&f wse ift wick fed iUuininating lamps, 
afi4 which shall meet all requirements as 
set forth m ASTM D 3699 S3. 
(3) rV^r 3 K. A regular grade kerosene suit 
aWe fof «se i» flue comiected burner ap- 
plianoes afi4 fof Hse wt \\\c\i. fed 
illuminating lamps, aft4 which shall meet 
aH roquiremonts as set forth m ASTM 
D 3699 83, except tl»t the presence ef 
abs e nc e ef coloring matter shall i» ro way- 
be determinativ e ©f whether a substance 



690 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



mt^L'tG tb© roquir e m e nls »f Ais grade »f 

korosono. 
(g) ASTM documents adopt adopted by refer- 
ence herein are available for inspection in the 
Office of the Director of the Standards Division 
and may be obtained at a cost as determined by 
the publisher by contactmg ASTM, 1916 Race 
Street, Philadelphia, PA 19103. 

Statutory Authority G.S. 119-26: 150B-14. 

SECTION .0500 - REGISTRATION AND 
BRANDING 

.0504 REGISTRATION PROVISIONS 

(e) The director may establish and maintain a 
normal prevailing range of quality specifications 
of motor fuels for similar or customary classi- 
fications, grades, or designations of motor fuels 
intended for the same use or application aft4 m 
HO ease shall Ae octano indox be le* tteft *^ 
For automotive gasolines and gasoline oxygenate 
blends, the minimum octane index shall be 87 
except that for those designated as "Premium" 
or bv a word or term of equivalent meaning, the 
minimum octane index shall be 91. 

Statutory Authority G.S. 1 19-26. 

TITLE 7 - DEPARIMENT OF CLLTLRAL 
RESOURCES 



J\ otice is hereby given in accordance with G.S. 
I SOB- 1 2 that the Department of Cultural Re- 
sources, Division of Archives and History intends 
to amend rule(s) cited as 7 NCAC 4N .0102. 

1 he proposed effecth'e dale of this action is 
March I, I9S9. 

1 he public hearing will be conducted at 10:00 
a.m. on December I . I9SS at Room 305, Archives 
and History-State Library Building. 109 E. Jones 
Street, Raleigh, .V. C. 

y^omment Procedures: Written comments may 
be submitted by November 28, 1988. to the Divi- 
sion of Archives and History, Room 305, 109 E. 
Jones Street, Raleigh, A'. C. Attn: William S. 
Price, Jr. 

CHAPTER 4 - ARCHIVES AND HISTORY 

SLBCHAP TER 4N - HISTORIC SITE 
REGLL.ATIONS 

SECTION .0100 - HISTORIC SITE 
REGLL.\TIONS 



.0102 ACTIVITIES PROHIBITED ON STATE 
HISTORIC SITE PROPERTY 

(15) bathe, wade, or swim in any waters in any 
state historic site, except at such times and in 
such places as the department may designate as 
swimming areas. In this Rule, "swimming 
area" means any beach or water area designated 
by the department as a place for swimming, 
wading, or bathing. 

Statutory Authority G.S. 121-4(8); 121-4(9)- 
I43B-62(2)d. 

TITLE 1 1 - DEPARTMENT OF 
INSURANCE 



ly otice is hereby gii'en in accordance with G.S. 
1 SOB- 12 that the Department of Insurance intends 
to amend r~ule(s) cited as 11 NCAC 4 .0115 - 
.0118, .0312 - .0315, .0319, .0320, .0416, .0418, 
.0419, .0421, .0423; and adopt rule(s) cited as 11 
NCAC 4 .0119, .0424 - .0429. 

I he proposed effective date of this action is 
.March I, 1989. 

1 he public hearing will be conducted at 10:00 
a.m. on December 1, 1988 at Third Floor Hearing 
Room, Dobbs Building, 430 N. Salisbury Street, 
Raleigh, N.C. 27611. 

(_ omment Procedures: Written comments should 
be directed to Tony Higgins at P. O. Box 26387, 
Raleigh, N.C. 27611. He may be reached by 
telephone at (919) 733-2004. Oral comments 
may be made at the hearing. 

CHAPTER 4 - CONSUMER SERVICES 
DIVISION 

SECTION .0100 - GENERAL PROVISIONS 

.0115 DIVISION PROCEDURES 

(*^ Adminiotrativo Porsormol. Thoro shall be 
efie aooiotant deputy commiooionor who go dutioo 
shall includo bet- »»*■ be limited te- t4ie provision 
ef ouponioion te- section ouponisoro aft4 tfee 
complaint anolysto. yVlso , the asoiotant deputy 
commissioner handles some &f tfee more oomph 
oatod complaints e* inquiries, conducts special 
r e search aft4 studios aft4 adviooo the deputy 
oommissionor as te pohcies, prinoiplos aft4 prac 
tio e s ia^ i olved m tl*e operation ef insuranco 
companies aft4 insurance contracts. 

\^ I LTL.V l!» .111 U 111 'VI ? r JUl J. ^^^^^^S CTTTCOT t^O O^^^TTTTT 

super i lsors f»f the division whose duties shall 
mclude b«t ftet- be limited to- assignment e# 



NORTH CAROLINA REGISTER 



691 



PROPOSED RULES 



complaintB aft4 inquiriofi (oaceo) \» analyoto, f%- 

ad' i 'ioe from A<* deputy commissioner, assistant 
doputy oommissionor ef othur divisiono whon 
nocL'ooar/ t© rosolvo a caoo. 

(e) Complaint iVnalyoto. Thero shall be com 
plaint analysts fof y*e division whoso duties shall 
include btrt Het be limited te rocoi' i ing aft4 com 
piling aii information related te the cas e , con 
tacting the insur e r ef ite representativ e involved 
ift the inquir>' &f against whom the complaint has 
been lodg e d, r e qu e sting a report e» tbe matt e r, 
aft4 acknowledging aft4 responding te- tbe re- 
ports, ' ■ ' ■ hen necessary, i^nalysts shall ake hav e 
the responsibility ef revi e wing att information 
aft4 recommending a course ©f action which wiH 
rosolvo the complaint ef inquir>^ as^ reporting 
sam e to the party who originated the complaint 
ef inquiry. 

(4^ Market Conduct iVnalysts. There shall be 
market conduct analysts fof tbe division ' ■ ■ ■ 'hose 
duties shall include fiei4 examination, invosti 
gation, analysis. aft4 evaluation ef domestic e* 
foreign insurers' »f th e ir representatives' market 
conduct pursuant te the market conduct e xam 
ination program ©f the National Association ef 
Insurance Commissioners. 

(ei (a) Complamt Handling Procedure. Com- 
plaints will be processed in the following manner: 

(1) Analyst will request explanation from 
company, agent or adjuster; 

(2) If he fmds that the complaint has been 
improperly handled, then he will recom- 
mend that proper action be taken; 

(3) If the issue is not resolved, the deputy 
commissioner may arrange a conference 
with company representatives to resolve 
the problem. 

(^ (b) Hearings. If a conference does not re- 
solve a disputed issue, the deputy commissioner 
may recommend to the commissioner that ap- 
propriate legal action be taken to insure compU- 
ance with the statutes, rules and regulations 
administered by the department. Such legal 
action may include the convening of a pubUc 
hearing to review, in light of the conduct wliich 
occasioned the complaint, the necessity of enter- 
ing an order against the party complained of. 
Orders entered a* a result ©f prov e n violations ef 
regulations which construe provisions ef /Vrticle 
^A ef Chapter ^ ©f the General Statut e s shall 
be cease aft4 desist orders. Orders entered as a 
r e sult ©f proven violations ©f a statute which 

i.-~ r^.-^,^t f < "t .-- ♦!-..-. «-. /"i j-L ■-! 1 1 T f T .". r- 4 V^ . -> in.-il'-itij-iri t V-> .i t-.i r^ 4 J- V-. -^ 1 I 
■J l_ ' ^^ 1 1 1 \_' L.' I IIU l-'^- 1 IU.1 1 J l\Jl \.H\J TTTTTtTTTTTTT L 1 1 \_ I I.' l^ 1 •Jl ILL^ 

be *j prescribed by the statute. 

(g^ (c} Complaints Represented by Counsel. 
The division will not investigate a complaint 
which is also the subject matter of a pending 



lawsuit fded by an attorney representing the 
complainant. If a lawsuit has not been filed but 
the complainant has retained an attorney, the di- 
vision will investigate the complaint according to 
its normal procedures provided it has first ob- 
tained the attorney's consent. 

Statutory Authority G.S. 57-1; 57-4; 57B-4; 
57B-I8; 58-9; 58-9.2; 58-18; 58-25; 58-25. /; 
58-26; 58-27; 58-39; 58-618. 

.0116 INQUIRIES AND INFORMATION 

The division maintains facilities and personnel 
to receive inquiries and complaints by telephone, 
letter or personal visit. The telephone number 
of the division is (919) 733-2032. The mailmg 
address of the division is: North Carolina De- 
partment of Insurance, Post Office Box 26387, 
Raleigh, North Carolina 27611, (Attention: 
Consumer Services Division). The street address 
of the division is: Room 507*7 3040 Dobbs 
Building, 430 North Sahsbury Street, Raleigh, 
North Carolina. 

Statutory Authority G.S. 58-7.3; 58-9. 

.0117 STATEMENT OF ACTION 

(a) When an insurer denies a claim after re- 
ceiving written notice thereof from the claimant 
sufficiently informative to enable the insurer to 
identify the specific coverage involved, the insur- 
er's denial shall be in writing and, m connection 
with first party claims, shall reasonably explain 
the basis m the poUoy m relation t© the facts fof 
the denial, shall cite specific policy provisions 
or legal basis relied upon in denying the claim. 

(b) When an insurer offers to settle a claim after 
receiving written notice thereof from the claimant 
sufficiently informative to enable the insurer to 
identify the specific coverage involved, the insur- 
er's offer of compromise settlement shall be in 
writing aft47 m connection witl* first party claimo, 

f- V-i n 1 1 t-i-\ ri L ■ j-i. Vi '-i\~tl\ t iw r-\l nt r^ *J^i Wn etc Ui tl^^ ^»-lj-i t n-i w^ i^i^ 
^^TC^n r^.fl-1 ..W-' llUUxT ^'Hl'HMII im? I^-ILJILJ III 11 l\J LI 1 U U I Ul 1 V^/ 

pohcy ift relation t© the facts fof the offor ©f 
compromise settlement, and shall cite specific 
policy provision or legal basis relied upon in 
support of the compromise. 

Statutory Authority G.S. 57-4; 57B-I2; 57B-I8; 
5S-9; 58-39; 58-54.4. 

.01 18 INSURANCE CARRIERS AS LENDERS 

Any lender who offers an insurance product to 
a consumer, either directly or indirectly through 
a subsidiary or affiliate in conjunction with an 
extension of credit shall inform the consumer of 
the protections afforded by G.S. 58-51.5. Noth- 
ing in this Regulation shall limit the right of the 



692 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



lender, for purposes of protecting the interest of 
the lender, to require insurance in connection 
with a loan. This Regulation shall not apply 
where the extension of credit arises out of a life 
insurance contract itself or where the extension 
of credit is subject to the provisions of Regu- 
lation Z (12 CFR 226), or other federal statutes 
or regulations requiring comparable disclosures. 

Statutory Authority G.S. 58-9(2); 5S-5J.5; 58-54. 

.0119 INSLRER DEFINKO 

For the purposes of this Chapter "insurer" shall 
mean any entity governed by the pro\isions of 
Chapter 57, 57B and 58. 

Statutory Authority G.S. 57-1; 57B-I8; 58-9. 

SECTION .0300 - LIFE: ACCIDENT AND 
HEALTH 

.0312 INFORMATION LSED IN CLAIM 
SETTLEMENTS 

(a) Any information (including medical infor- 
mation) used in whole or in part as the basis of 
settling a life, accident health or disability claim 
shall be furnished to the department as necessary 
in connection with specific complaints and in- 
quiries. As used in tliis Section, "furnished" shall 
include either mailing claim settlement informa- 
tion to the department or exhibiting such infor- 
mation to the appropriate complaint analyst 
division personnel at a time and place oonvement 
set b^ to the analyst, division personnel. 

(b) To the extent permitted by law, the de- 
partment shall treat medical information as con- 
fidential. 

Statutory Authority G.S. 57-4; 57-10; 57B-I2; 
57B-18; 58-9; 58-11; 58-16; 58-25.1; 58-26; 
58-27; 58-54.5. 

.0313 PROVISIONS OF CONTRACTS 

In order to prevent unfair discrimination among 
insureds, the following phrases and provisions 
commonly found in life, accident, health and 
disability contracts, if not expressly defmed in 
such contracts, shall be construed by the depart- 
ment in the following manner: 
(1) House Confmement. As used in disability 
contracts, "house confmement" shall be 
considered a description of the extent of ill- 
ness rather than a restriction of the insured's 
conduct or activities. The insured's partic- 
ipation in activities which are considered by 
his physician to be for therapeutic rather 
than for business or personal reasons shall 
not prevent recovery under such disability 
contracts. 



(2) Offsets Against Social Security Awards. 
As used in disability contracts, "offsets 
against social security awards" shall be con- 
strued as permitting the inouranco company 
insurer to offset only the amount of the ori- 
ginal social security award and not subse- 
quent cost of hving increases. 

(3) Regular Care and Attendance of a Physi- 
cian. As used in life, accident and health 
and disability poUcies, "regular care and at- 
tendance of a physician" shall not be con- 
strued to require insureds to see or be under 
the care of a physician on a regular basis if 
it can be shown that the insured has reached 
his maximum point of recovery yet is still 
disabled under the terms of the insurance 
contract. This requirement shall not, how- 
ever, restrict the right of the company, at 
company expense, to periodically examine 
or cause to have examined the insured ac- 
cording to the terms of the contract of in- 
surance. 

(4) Premature Baby. A premature baby shall 
not be considered a well baby. The pro- 
tection afforded newborn infants under G.S. 
58-251.4 shall be provided to premature ba- 
bies. 

(5) Medical Necessity. "Medical necessity" 
shall be construed as including treatment 
which restores not only the insured's phys- 
ical but also his mental well-being. As used 
in this Section, "restoration of mental well- 
being" does not require coverage of psychi- 
atric disorders when such disorders are 
excluded under the express terms of the 
contract. 

(6) Sound Health. The question, "Are you in 
sound health:" shall be considered ambig- 
uous, and therefore answers to that question 
on an insurance apphcation shall not be 
used as the basis for rescission of a policy 
or denial of a claim. 

Statutory Authority G.S. 57-1; 57-4; 57B-8; 
57B-I2; 57B-I8; 58-9; 58-54; 58-54.4; 58-249; 

.0314 PREMIUM NOTICES: PAYMENTS AND 
REFUNDS 

The commissioner shall consider an unfair trade 
practice the failure by an inouranco company 
insurer to adhere to any of the following proce- 
dures concerning premium notices, payments and 
refunds on life, accident, health, or disability 
policies when such failure is so frequent as to in- 
dicate a general business practice: 

(1) Premium Notices. Any inouranco company 
insurer which makes a practice of sending 
premium notices should shall maintain rc- 



NORTH CAROLINA REGISTER 



693 



PROPOSED RULES 



cords sufTicicnt to show that it mailed or 
otherwise delivered such notice to an indi- 
vidual insured or policy owner. 

(2) Timely Remittance. Insurance companies 
■ ihould shall use date of mailing, rather than 
date of receipt, to detemiine whether the in- 
sured has made timely remittance of pre- 
mium, provided the premium payment is 
recci\ed within thruo seven days after either 
the termination date of the policy or the last 
day of its grace period, whichever is later. 

(3) Right to Return Policy. When such right 
is given by contract or statute, ft# inouronoo 
company insurer should shall abridge or 
frustrate the right of the insured to return a 
policy within 10 days after he receives it for 
a fuU refund of premiums paid. Evidence 
of such delivery shall be signed statements 
from the policyowner of the date of delivery 
or copies of signed certified mail receipt. 

(4) Unearned Premium Refund. When such 
right is given by contract or statute, no tH- 
suranc e company insurer should shall 
abridge or frustrate the right of the insured 
to receive a refund of unearned premium. 

(5) Unearned Premium on Health Policies. 
WTien an insured covered by an accident, 
health or disability policy dies during the 
term of the policy, his intiuranc e compajiy 
insurer should shall refund the unearned 
premium to his estate. 

(6) Commintding. No licensed person mav 
commingle premiums, insurance deposits or 
other such funds. Such funds are considered 
to have been received in a fiduciary capacity 
on behalf of policyowners and must be im- 
mediately forwarded to the proper insurers 
or be deposited into an authorized account 
which is separate and distinct from the per- 
son's operating and or personal accounts. 
The account shall be used to receive and 
disburse premiums paid for insurers, return 
premiums to policyowners, bank charges for 
the account and transfer of earned commis- 
sions or fees. 

Statutory Authority G.S. 57-4; 57B-8; 57B-/2; 
57B-/8; 58-9: 58-26; 58-54.9, 58-250.1; 58-251.1. 

.0315 ISSL.VNCE OF CONTRACTS 

The commissioner shall consider an unfair trade 
practice the failure by an inouranoo company 
insurer to adhere to any of the following proce- 
dures with respect to the issuance of life, acci- 
dent, health, or disability policies when such 
failure is so frequent as to indicate a general 
business practice: 



(1) Policies to Cover Newborn Infants. No 
health application or requirements of 
insurability ohould shall be used to circum- 
vent the requirements of North Carolina 
General Statute 58-251.4. 

(2) Rating of Guaranteed Issue Coverages. 
There should shall be no rating of policies 
where guaranteed issue at a specified rate is 
represented. When only guaranteed issue is 
represented, the insurer should shall disclose 
in writing to any applicant subjected to in- 
dividual rating the fact that his rate deviates 
from the standard rates for such coverage. 
This Section shall not apply to individual 
policies issued to employees under a con- 
tract between their employer and his insurer. 

(3) Replacement of Existing Coverage. With 
respect to individual accident, health and 
disability coverages, when an insurer's agent, 
by misrepresenting the new pohcy as a sup- 
plement or addition to the existing policy, 
induces an insured to assent to the replace- 
ment of his existing policy with a new policy 
from ti*e samo insur e r, new waiting periods 
should shaU be decreased by the amount of 
time coverage was afforded under the exist- 
ing policy. 

(4) Continuous Coverage Under Credit Life, 
Accident and Health PoHcies. In a series of 
credit life or credit accident and health in- 
surance transactions where the insured, the 
lender, and the insuranc e company insurer 
are the same and where is no appreciable 
lapse in coverage between transactions, the 
waiting periods of the insurance agreements 
should shall run from the date of the first 
insurance contract, at least to the extent of 
the amount and term of the indebtedness 
outstanding at the time of renewal or refi- 
nancing. 

Statutory Authority G.S. 57-4; 578-8; 578-12; 
578-18; 58-9; 58-44.4; 58-54; 58-54.9; 58-251.4; 
58-624. 

.0319 CLAIMS PRACTICES: LIFE: ACCIDENT 
AND HEALTH INSURANCE 

The commissioner shall consider as prima facie 
violative of G.S. 58-54.4(1 1) the failure by an »- 
surance company insurer to adhere to the fol- 
lowing procedures concerning settlement of life, 
accident, health and disability claims when such 
failure is so frequent as to indicate a general 
business practice: 
(1) Examining Physician's Opinion. When the 
patient's health is in question, an insurer 
should shall give greater weight to the opin- 
ion of a physician who has examined the 



694 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



patient than to the opinion of a physician 
who has not examined the patient and 
whose opinion is based solely on a review 
of the examining physician's notes or re- 
ports. As used in this Section, "examination 
of the patient" shall include the interpreta- 
tion by a specialist of the results of diagnos- 
tic tests performed on the patient by others. 

(2) Settlement Offers. Initial offers of settle- 
ment or compromise made by an insurer or 
its representative iihould shall remain open 
for a reasonable period of time. 

(3) .Multiple Health Impairments. When an 
insured is confined to the hospital with 
multiple health impairments some of which 
ma\ be excluded from coverage, the insurer 
or Its representative should shall make pro 
rata payments where treatment for excluded 
conditions can be separated. 

(4) .Assignment of Benefits. If an accident, 
health or disabilit> contract does not pro- 
hibit assignment of benefits and a proper 
assignment (including notice to the insurer 
prior to the payment of the claim) is made, 
the insurer Hihould shall honor the assign- 
ment even though it may have erroneously 
paid the insured. Submission of a com- 
pleted claims form G33H and its 
successor(s) indicating that an assignment is 
on file should shall be treated as though it 
were submission of the actual assignment. 

(5) Claim Status Reports. If benefits claimed 
under an accident, health or disabihtv con- 
tract have not been paid within 30 days after 
receipt of the initial claim by the insurer, the 
insurer shall at that time mail a claim status 
report to the insured. 

Statutory Authority G.S. 57-/; 57-4; 57B-I2; 
57B-/8; 58-9; 58-54.4. 

.0320 STUDENT LOANS 

Whenever a life in - iuranco company insurer of- 
fers an insurance product that has associated with 
it the possibility of that guaranteed student loan 
through the Federal Higher Education Act in 
connection with the solicitation or sale of the Life 
insurance product, said agent of company and 
applicant shall execute a form to be approved by 
the department. Said form shall set out the nghts 
of the apphcant under General Statute 58-51.5, 
and, among other things, also shall state that the 
purchase of life insurance is not necessar> to ob- 
tain a federal guaranteed student loan and that 
information on alternative sources of such loans 
can be had by contacting student fmance officers 
at institutions of higher learning. Once this form 
is executed, one copy of the same shall be left 



with the applicant and the insurance carrier, is- 
suing the insurance product, shall keep a copy 
of the form in their its records for a period of at 
least three years. 

Statutory Authority G.S. 58-Q: 58-51.5; 58-54. 

SECTION .0400 - PROPERTY AND LIABILITY 

.0416 BILLING PROCEDURES FOR 
Al TOMOBILE INSURANCE 

(a) With respect to new business, an insurer 
shall take no more than 90 days from the effec- 
tive date of the policy to make any investigation 
other than review of the initial application and 
to biU the insured for proper classification or 
sub-classification. 

(b) With respect to renewal business, an insurer 
shall not bill for any additional premium after the 
renewal quotation is made (for any condition 
which existed at the time of renewal and which 
is on the dnser's motor vehicle record), unlnus 
th<* in cured dour , b^ prosidt ' complotn infonna 
t+»ft neoeoL . ary <«• undfrv i ritij Ae pohuy ef malc e s 
a» L ' ffurt te- ' . sithhold rating information ef unloos 
tfee billing is made to corroot a olorioal error. 

(c) With respect to renewal business, if the in- 
sured does not provide complete rating informa- 
tion necessary to underwrite the policy or makes 
an effort to withhold rating information, the 
insurer shall take no more than 90 days from the 
effective date of the renewal to make inquiry of 
the insured, to make any other investigation and 
to bin the insured for proper classification and 
sub-classification. 

(d) When an insurer obtains information from 
sources other than the Department of Motor 
Vehicles for use in underwriting an automobile 
policy and the insured alleges that such informa- 
tion is incorrect, the insurer shall verify the ac- 
curacy of such information. 

(e) Unearned premium refunds e» auto habihty 
afi4 phy i ;aoal damage pohoios shall be determined 
from the tiate tfee conoumor givoo direct notice te- 
a company »f a» agent »f the company ef ouch 
oancollation. etfective date of canceUation re- 
quested by the insured. In the case of physical 
damage insurance where there is a loss payee, the 
efl'ective date of cancellation for the purposes of 
determirung unearned premium refund shall be 
10 days from the date cancellation notice was 
given directly to a company or a company's 
agent . I lowevor, if th© conoumer eaft Fihow proof 
t4«t within U*« W day period m Ai* Rule wher e 
cancellation invoh'oo a less payee; that- tfeat- thi* 
conoumer ]pt&^ obtained replacement phyoical 
damage coverage which included A» less payee, 
then determination ©f thi* cancellation date fef 



NORTH CAROLINA REGISTER 



695 



PROPOSED RULES 



purpo!: . es &f dotL'rmining unoamod promium f©- 

^^^rWI ^TWITT T^^ nCCTT? r^T^^TT ^^^W KlUT UU.T. v LTF CoT^T ICT^^^^ 

» cos' e rag e fof tfe« lee* payoo during Ae -W day 

lap CO. Ghall fe^ dL'tormirn ^ as if fte less payoo was 
involved. 

Statutory Authority G.S. 58-9; 58-248.34. 

.0417 DRIVE-IN CLAIM SERVICE FACILITIES 

No insurer shall require any claimant to use a 
drive-in claim service operated by the insurer. 
The claimant's voluntary utilization of a drive-in 
claim service shall not prejudice the right of ei- 
ther party to obtain independent appraisals and 
negotiate settlement on the basis of such ap- 
praisals. 

Statutory .-luthority G.S. 58-9; 58-54.4; 

.0418 TOTAL LOSSES ON .MOTOR 
VEHICLES 

The commissioner shall consider as prima facie 
violative of G.S. 58-54.4(11) the failure by an 
insurer to adhere to the following procedures 
concerning settlement of covered "total loss" 
motor vehicle claims submittod by fifst- party 
claim anto when such failure is so frequent as to 
indicate a general business practice: 

(1) If the insurer and the claimant are initially 
unable to reach an agreement as to the \alue 
of the vehicle, the insurer should shall base 
any further settlement offer not only on 
published national average values of similar 
vehicles, but also on the value of the vehicle 
in the local market. Local market value 
should shall be determined by using either 
the local market price of a comparable ve- 
hicle or, if no comparable vehicle can be 
found, quotations from at least two qualified 
dealers within the local market area who 
have actually inspected the damage vehicle. 
Additionally, if the claimant represents that 
the vehicle actually owned by him was in 
better than average condition, the insurer 
should shall give due consideration to the 
condition of the claimant's vehicle prior to 
the accident. 

(2) \Vhere the insurer has the right to elect to 
replace the vehicle and does so elect, the re- 
placement vehicle should shall be available 
without delay, similar to the lost vehicle, and 
paid for by the insurer, subject only to the 
deductible and to the value of any enhance- 
ments acceptable to the insured. 

(3) If the insurer makes a deduction for the 
salvage value of a "total loss" vehicle re- 
tained by the claimant, the insurer, if so re- 



quested by the claimant, should shall furnish 
the claimant with the name and address of 
a salvage dealer who will purchase the sal- 
vage for the amount deducted. The insurer 
shall be responsible for all reasonable towing 
and storage charges and no insurer shall 
abandon the salvage of a motor vehicle to a 
towing and/or storage service without the 
agreed permission of the ser^'ice involved. 
In instances where the towing and storage 
charges are paid to the owner, the check or 
draft for the amount of such charges shall 
be payable jointly to the owner and the 
towing/storage service. 

(4) If a written statement is requested by the 
claimant, a total loss payment by an insurer 
should shall be accompanied by a written 
statement listing the estimates, evaluations 
and deductions used in calculating the pay- 
ment, if any, and the source of these values. 

(5) When a motor vehicle is damaged i» an 
amount which equals or exceeds IS 60 per- 
cent of the preaccident actual cash value, an 
insurance carrier, upon the request of the 
owner of the vehicle, shall "total loss" the 
automobile by paying the insured the pre- 
accident value, and; in return, receiving pos- 
session of the legal title of the salvage of said 
automobile. At the election of the insured, 
or in those circumstances where the insur- 
ance carrier will be unable to obtain an un- 
encumbered title to the damaged vehicle; 
then the insurance carrier shall have the right 
to deduct the value of the salvage of the total 
loss from the actual value of the vehicle and 
leave such salvage with the insured; subject 
to the insurance carrier abiding by Subpara- 
graph (3) of this Regulation. 

Statutory Authority G.S. 58-9; 58-54.4. 

.0419 MOTOR VEHICLE REPAIR 
ESTIM.\TES 

The commissioner shall consider as prima facie 
violative of G.S. 58-54.4(11) the failure by an 
insurer to adhere to the following procedures 
concerning repair estimates on covered motor 
vehicle damage claims submitted by fos* party 
claimants when such failure is so frequent as to 
indicate a general business practice: 

(1) If the insurer requires the claimant to obtain 
more than two estimates of property dam- 
age, the cost, if any, of such additional esti- 
mates should shall be borne by the insurer. 

(2) No insurer should shall refuse to inspect the 
damaged vehicle if a personal inspection is 
requested by the claimant. However, if the 
damaged vehicle is situated other than where 



696 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



it is normally used or cannot easily be 
moved, the insurer may satisfy the require- 
ments of this Section by having a competent 
local appraiser inspect the damaged vehicle. 

(3) When the insurer elects to have the claim- 
ant's property repaired, the insurer ohould, 
shall, if so requested by the claimant, furnish 
the claimant with a legible front and back 
copy of its estimate. This estimate ohould 
shall contain the name and address of the 
insurer and the name and address of the re- 
pair scr\ice making the estimate. If there is 
a dispute concerning pre-existing damage to 
the vehicle which the insurer does not intend 
to have repaired, the extent of such damage 
tihould shall be clearly stated in the estimate. 

(4) No insurer uhould shall require a claimant 
to utihze a particular repair service. 

(5) No insurer shall refuse to provide the 
claimant with copies of an estimate it uses 
to offer a settlement. 

Statutory Authority G.S. 58-9; 58-54.4. 

.042r HWDLING OF LOSS AND 
CI AIM PAYMENTS 

The commissioner shall consider as prima facie 
violative of G.S. 58-39 and 58-54.4(11) failure by 
an insurer to adhere to the following procedures 
concerning loss and claim payments when such 
failure is so frequent as to indicate a general 
business practice: 

(1) Loss and claim payments should shall be 
mailed or otherwise delivered promptly after 
the claim is settled. 

(2) Unless the insured consents, no insurer 
should shall deduct from a loss or claim 
payment made under one policy premiums 
owed by the insured on another policy. 

(3) No insurer uhould shall withhold the entire 
amount of a loss or claim payment because 
the insured owes premium or other monies 
in an amount less than the loss or claim 
payment. 

(4) If a release or full payment of claim is exe- 
cuted by an insured or claimant, involving a 
repair to a motor vehicle, prior to or at the 
time of the repair, it shall not bar the riglit 
of the claimant to promptly assert a claim 
for property damages unknown to either the 
claimant or to the insurance carrier prior to 
the repair of the vehicle or a claim for di- 
minished value, directly caused by the acci- 
dent which could not be determined or 
known until after the repair or attempted 
repair of the motor vehicle. Claims asserted 
withm 30 days after repair for diminished 
value and 30 days after discovery of un- 



known damage shall be considered promptly 
asserted. 
(5) Except in the total loss situations, the 
insurer shall be liable for the full cost of 
agreed upon repairs less policy deductibles. 

Statutory Authority G.S. 58-9; 58-39; 58-54.4. 

.0423 ETHICAL STANDARDS 

(a) Every agoncy, agent, limited representative, 
broker, adjuster, appraiser, or other insurer's 
representative shall, when in contact with the 
public: 

(1) promptly identify himself and his occupa- 
tion; 

(2) carry the license issued to him by the De- 
partment of Insurance while performing 
his duties and display it upon request to 
any insured or claimant, any repairer at 
which he is investigating a claim or loss, 
any department representative, or any 
other person with whom he has contact 
while performing his duties; 

(3) conduct himself in such a manner as to 
inspire confidence by fair and honorable 
dealings. 

(b) No adjuster or appraiser shall: 

(1) recommend the utilization of a particular 
motor vehicle repair service without 
clearly informing the claimant that he is 
under no obligation to use the recom- 
mended repair service and may use the 
service of his choice; 

(2) accept any gratuity or other form of 
remuneration from a repair service for re- 
commending that repair service to claim- 
ants; 

(3) purchase salvage from a first party claim- 
ant whose claim he is adjusting or ap- 
praising without first disclosing to the 
claimant the nature of his interest in the 
transaction; 

(4) Intimidate intimidate or discourage any 
claimant from seeking legal advice and 
counsel by withdrawing and reducing a 
settlement offer previously tendered to the 
claimant or threatening to do so if the 
claimant seeks legal advice or counsel. 
No adjuster shall advise a claimant of the 
advisability of seeking or not seeking legal 
counsel nor shall recommend any legal 
counsel to any claimant under any cir- 
cumstance. 

Statutory Authority G.S. 57-4; 58-9; 58-54(4); 
58-57; 58-611; 58-614; 58-6/5. 

.0424 PURPOSE 



NORTH CAROLINA REGISTER 



697 



PROPOSED RULES 



The purpose of this Rule is to set forth stand- 
ards for prompt, fair, and equitable settlements 
of motor vehicle physical damage insurance 
claims with regard to the use of after market 
parts. 

Statutory Authority G.S. 58-9. 

.0425 DEFINITIONS 

As used in this Section the following terms shall 
be construed as follows: 

( 1) ",'Vfter market part" means a part made by 
a nonoriginal manufacturer. 

(2) "Insurer" includes any person authorized 
to represent the insurer with respect to a 
claim and who is acting within the scope of 
the person's authority. 

(3) "Nonoriginal manufacturer" means any 
manufacturer other than the original man- 
ufacturer of a part. 

(4) "Part" means a sheet metal or plastic part 
that generally is a component of the exterior 
of a motor vehicle, including an inner or 
outer panel. 

Statutory Authority G.S. 58-9. 

.0426 IDENTIFICATION 

Ever> after market part that is subject to this 
Rule and that is manufactured after November 
1, 1988, shall carr>' sufficient permanent identifi- 
cation of its manufacturer. Such identification 
shall be accessible, to the extent physically pos- 
sible, after installation. 

Statutory Authority G.S. 58-9. 

.0427 LIKE KIND AND QUALITY 

No insurer shall require the use of an after 
market part in the repair of a motor vehicle un- 
less the after market part is at least equal to the 
original part in terms of fit, quality, and per- 
formance. Insurers specifying the use of after 
market parts shall consider the costs of any 
modifications that may become necessary when 
making repairs. 

Statutory Authority G.S. 58-9. 

.0428 DISCLOSURE REQUIREMENTS 

(a) Every insurer that writes motor vehicle 
physical damage insurance in this state and that 
intends to require or specify the use of after 
market parts must disclose to its policyholders in 
writing, either in the pohcy or on a sticker at- 
tached thereto, the following information in no 
smaller print than 10 point type; 



IN THE REPAIR OF YOUR COV- 
ERED AUTO UNDER THE PHYS- 
ICAL DAMAGE COVERAGE 
PROVISIONS OF THIS POLICY, WE 
MAY REQUIRE OR SPECIFY THE 
USE OF AUTOMOBILE PARTS NOT 
MADE BY THE ORIGINAL MAN- 
UFACTURER. THESE PARTS ARE 
REQUIRED TO BE AT LEAST 
EQUAL IN TERMS OF FIT, QUAL- 
ITY, AND PERFORMANCE TO THE 
ORIGINAL MANUFACTURER 

PARTS THEY REPLACE. 

(b) An insurer must disclose to a claimant in 
writing, either on the estimate or on a sepa- 
rate document attached to the estimate, the 
following information in no smaller print 
than 10 point type: 

THIS ESTIMATE HAS BEEN PRE- 
PARED BASED ON THE USE OF 
AUTOMOBILE PARTS NOT MADE 
BY THE ORIGINAL MANUFAC- 
TURER. PARTS USED IN THE RE- 
PAIR OF YOUR VEHICLE BY 
OTHER THAN THE ORIGINAL 
MANUFACTURER ARE REQUIRED 
TO BE AT LEAST EQUAL IN TERMS 
OF FIT, QUALITY, AND PER- 
FORMANCE TO THE ORIGINAL 
MANUFACTURER PARTS THEY 
ARE REPLACING. 

All after market parts installed on a motor vehicle 
shall be clearly identified on the estimate and in- 
voice for such repair. 

Statutory Authority G.S. 58-9. 

.0429 ENFORCEMENT 

A violation of this Rule is deemed by the com- 
missioner to be an unfair trade practice under 
Article 3 A of General Statute Chapter 58. 

Statutory Authority G.S. 58-9. 

TITLE 15 - DEPARTMENT OF NATURAL 

RESOURCES AND CO^L\IL^MTY 

DEVELOPMENT 



lyotice is hereby given in accordance with G.S. 
I50B-I2 that the Division of Environmental Man- 
agement intends to adopt rule(s) cited as 15 
NCAC 2M .0101 - .0802. 



698 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



1 he proposed effective date of this action is 
March I, 1989. 

1 he public hearing will be conducted at 2:00 
p.m. on December I, I9S8 at Archdale Building, 
Ground Floor Hearing Room, 512 N. Salisbury 
Street, Raleigh, NC. 

y^omment Procedures: Any person or organiza- 
tion desiring to make oral comments at the hear- 
ing should register to do so at the hearing. 
Statements will be limited to JO minutes and one 
typewritten copy of any such statement should be 
submitted to the panel conducting the hearing. 
Any additional comments on the rules should be 
forwarded to the Division of Environmental Man- 
agement by December 1 , 1988: 

Cov M. Batten, 
NRCD, P.O. Box 27687 
Raleigh, NC 27611, 
(919) 733-6900. 

CHAPTER 2 - ENVIRONMENTAL 
MANAGEMENT 

SUBCHAPTER 2M - NORTH CAROLINA 

WATER POLLUTION CONTROL REVOLVING 

FUND 

SECTION .0100 - GENERAL PROVISIONS 

.0101 PURPOSE 

(a) For the purposes of this Chapter, the "Final 
Initial Guidance for State Revolving Funds" 
published by the United States Environmental 
Protection Agency in January 1988 is hereby 
adopted by reference to include later amend- 
ments pursuant to G.S. 150B- 14(c). 

(b) Loans for wastewater treatment facilities 
and interceptor sewers from the Water Pollution 
Control Revolving Fund established by the 
North Carolina Clean Water Revolving Fund 
Grant Act of 1987, G.S. 159G, shall be made in 
accordance with this Chapter. 

Statutory Authority G.S. 1 SOB- 14(c); I59G-I5. 

.0102 DEFINITIONS 

In addition to the defmitions in G.S. 159G-3, 
the following defmitions will apply to this Chap- 
ter: 

(1) "Act" means North Carolina Clean Water 
Revolving Loan and Grant Act of 1987, 
G.S. 159G. 

(2) "Award" means the offer by the receiving 
agency to enter into a loan commitment for 
a specilied amount. 



(3) "Award of contract" means the award by 
the loan recipient to a contractor of a con- 
tract to construct the project as bid. 

(4) "Bid" means the amount of money for 
which a contractor offers to construct a 
project. 

(5) "Contingency costs" means unforeseen 
costs or situations not included in the esti- 
mate of project costs. 

(6) "Commitment" means a binding agree- 
ment to pay loan funds at intervals as ex- 
penses are incurred. 

(7) "Date of Completion" means the date on 
which operations of the treatment works are 
initiated or capable of being initiated, 
whichever is earlier. 

(8) "Environmental Protection Agency" 
means the Federal agency established pur- 
suant to Reorganization Plan No. 3 of 1970, 
effective December 1, 1970. 

(9) "Federal capitalization grant" means a 
grant by the Environmental Protection 
Agency to the state for the purpose of pro- 
viding loan funds to fmance publicly owned 
wastewater facilities. 

(10) "Federal Clean Water Act" (CWA) means 
the Act of Congress designated as P.L. 
92-500, approved October 18, 1972, as 
amended from time to time. 

(11) "Inspection" means inspection or in- 
spections of a project to determine percent- 
age completion of the project; conformance 
with plans and specifications; and compli- 
ance with applicable federal, state, and local 
laws. 

(12) "Intended Use Plan" means an aimual 
plan to identily the proposed uses of the 
amounts available in the Water Pollution 
Control Revolving Fund. 

(13) "Project" means the work described in the 
application for a loan under this Chapter. 

(14) "Receiving Agency" means the Con- 
struction Grants Section of the Division of 
Environmental Management. 

Statutory Authority G.S. J59G-3; 159G-I5. 

.0103 PROCEDURES 

Operating procedures for loans made from the 
Water Pollution Control Revolving Fund have 
been developed according to Federal guidelines 
and are maintained and implemented by the re- 
ceiving agency. 

Statutory Authority G.S. l59G-5(c). 

SECTION .0200 - APPLICABLE ACTIVITIES 



NORTH CAROLINA REGISTER 



699 



PROPOSED RULES 



.0201 LOAN ACTIVITIES 

(a) Loans shall be available for the construction 
of publicly owned wastewater treatment works 
that appear on the state's priority list and as they 
are defined in Section 212 of the I-ederal Clean 
Water Act, except for wastewater collection sew- 
ers. 

(b) Loans may be available for implementation 
of a non-point source pollution control manage- 
ment program under Section 319 of the Federal 
Clean Water Act; and 

(c) Loans may be available for development 
and implementation of an estuary conser\-ation 
and management plan under Section 320 of the 
Federal Clean Water Act. 

Statutory Authority G.S. 159G-5(c): I59G-I5. 

.0202 ADMIMSTR.ATIVE E.XPENSES 

(a) Funds in the Water Pollution Control Re- 
volving Fund account shall be used for the rea- 
sonable costs of administering the fund, not to 
exceed four percent of the Federal capitalization 
grant award received by the account. These 
funds shall be used for this purpose alone, and 
may accrue until expended for administrative 
purposes. 

(b) Agreement to a debt instrument by loan 
applicants shall include the payment of a two 
percent closing fee. These funds shall accrue, to 
be used only for the reasonable costs of admin- 
istenng the Water Pollution Control Revolving 
Fund. 

Statuton- Authority G.S. l59G-5(c): J59G-6(d): 
159G-15. 

SECTION .0300 - ELIGIBILITY 
REQUIREMENTS 

.0301 EI IGIBLE PROJECT COSTS 

Loans to local umts of government for the 
construction of publicly owned wastewater 
projects may be up to 100 percent of allowable 
project costs as defined in Section 212 of the 
CWA, being limited only to the following: 

(1) costs necessary to meet permit limits; 

(2) costs necessary" to meet twenty years' do- 
mestic growlh: 

(3) costs to pro\ide for 10 percent unspecified 
industrial growth; and 

(4) contingency costs to represent 10 percent 
of the estimated construction costs. 

Statutory Authority G.S. 159G-5(ci; I59G-I5. 

.0302 LIMIT.VriON OF DOLBLE BENEFITS 

(a) A project which is receiving a Federal con- 
struction grant under 201(2) of the Federal Clean 



Water Act is prohibited from receiving a loan 
from the Water Pollution Control Revolving 
fund for the non-Federal share of the project's 
costs. 

(b) Loans may be made for subsequent phases 
or segments of wastewater facilities that previ- 
ously received Federal grant assistance for earlier 
phases or segments of the same facility. 

(c) Loans may also be made to cover ineligible 
portions of Federal grant projects such as reser\'e 
capacity, major rehabilitation, or advanced treat- 
ment components declared grant inehgible. 

Statutory Authority G.S. l59G-5(cj; I59G-I5. 

.0303 LIMIT.\TION OF LO.ANS 

The maximum principal amount of loan made 
to any one local government unit during any fis- 
cal year shall be seven and one-half million dol- 
lars'($7,500,000). 

Statutory Authority G.S. 159G-5(c); 159G-15. 

SECTION .0400 - APPLICATIONS 

.0401 APPLICATION FILING DEADLINES 

.Applications for loans made from the Water 
Pollution Control Revolving Fund must be 
postmarked or delivered to the Division of Envi- 
ronmental Management on or before .March 31 
of each year, in order to be approved for loan 
funds available during the following fiscal year. 
Applications must be sufficiently complete and 
contain adequate information to permit the 
agency to establish realistic schedules and project 
costs. Any application that does not contain 
such sufficient information shall be by-passed for 
that review period. 



Statutory Authority G.S. 
I59G-I5. 



I59G-5(c); I59G-8; 



.0402 GENERAL PROVISIONS 

(aj Applications for loans under this Chapter 
shall be submitted on the appropriate forms and 
accompanied by all documentation, assurances 
and other information called for in the in- 
structions for completing and filing applications. 
Information concerning any grant or loan funds 
from any other source that the applicant has ap- 
plied for or recei\'ed for the project shall be dis- 
closed on the application. 

(b) An applicant shall furnish information in 
addition to or -supplemental to the information 
contained in its application and supporting doc- 
umentation upon request by the recei\ing 
agency. 



'00 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(c) Any application that does not contain in- 
formation sufficient to permit the receiving 
agency to review and approve the project for 
inclusion on the Intended Use Plan may be by- 
passed. 

(d) An application may not be filed with the 
receiving agency after the award of contract on a 
project. 

(e) An application may be withdrawn from 
consideration upon request of the applicant, but 
if resubmitted shall be considered as a new ap- 
phcation. 



Statutory Authority G.S. 
I59G-I5. 



I59G-8: I59G-9: 



Federal Clean Water Act for loans made 
for projects constructed in whole or in 
part with funds made directly available by 
the Federal capitalization grant. 
(4) Consideration shall also be given to ap- 
phcable cross cutting Federal authorities, 
(b) The categorical elements and items to be 
considered in assigning priorities to each appli- 
cation for which loan funds are sought, and the 
points to be awarded to each categorical element 
and item, are set forth in 15 NCAC 2F, 
.0102(b)(l)-(3), and .0103. 



Statutory Authority G.S. 
I59G-I5. 



I59G-5; I59G-8; 



.0403 PROJECT SCHEDULE AND 
RESOLLTION 

(a) Every appUcation shall be accompanied by 
a project schedule which specifies dates for mile- 
stone events including submission of a facility 
plan, construction drawings and specifications, a 
draft user charge system and sewer use ordinance, 
proposed dates for bid tabulation and award, a 
construction start date, and a proposed project 
completion date. 

(b) Every appUcation shall be accompanied by 
an adopted resolution as required by G.S. 
159G-9(3) stating that the unit of government 
has complied or will substantially comply with 
all apphcable federal, state and local laws or rules. 
Such resolution shall be certified or attested to 
as a true and correct copy as adopted. 

Statutory Authority G.S. 159G-5(c); I59G-9; 
I59G-15. 

SECTION .0500 - CRITERIA FOR EVALUATION 
OF ELIGIBLE APPLICATIONS 



SECTION .0600 - LO.\N AWARD: 

COiMMITMENT AND DISBURSEMENT OF 

LOANS 

.0601 DETERMINATION OF LOAN AWARDS 

(a) All funds appropriated to the Water Pol- 
lution Control Revolving Fund account under 
this Chapter for a fiscal year will be available that 
particular fiscal year. 

(b) Loans principal repayments and interest 
payments from loans made from the Water Pol- 
lution Control Revolving Fund account, will ac- 
crue to this account. These funds, along with 
interest earned on them, will be available as they 
accumulate. 

(c) The funds available in the Water Pollution 
Control Revolving Fund will be awarded to ap- 
plicants on the approved state priority list as they 
are scheduled on the Intended Use Plan. 

(d) Upon a recipient's acceptance of a loan of- 
fer and its conditions, funds are reserved for a 
particular project as per Section 602(b)(3) of the 
CWA. 



.0501 GENERAL CRITERIA 

(a) In determining the priority to be assigned 
each eligible application, the Environmental 
Management Commission will give consideration 
to the following factors; 

(1) Consideration shall be given to all projects 
submitting applications for loans for 
wastewater treatment systems under the 
Act as per 159G-8. 

(2) Primary consideration shall be given to the 
first use of the funds for the enforceable 
requirements of the Federal Clean Water 
Act. This injunction applies to the use 
of funds from the Federal capitalization 
grant, the state match, and the repayment 
of the first loans awarded from the Water 
Pollution Control Revolving Fund. 

(3) Consideration shall also be given to the 
specific statutory requirements of the 



Statutory Authority G.S. l59G-5(c); 159G-I5. 

.0602 CERTIFICATION OF ELIGIBILITY 
AND NOTIFICATION OF LOAN 
COMMITMENT 

(a) The receiving agency shall forward to the 
Office of State Budget and Management a certif- 
icate of eligibility and notification of commit- 
ment for each application for which a loan 
commitment has been made. 

(b) The certificate of eligibility shall indicate 
that the applicant meets all eligibility criteria and 
that all other requirements of the Act and of the 
rules governing the account have been met. 

(c) The notification of commitment shall indi- 
cate the amount and the fiscal year of the loan 
commitment. 

Statutory Authority G.S. I59G-I2; I59G-I5. 



NORTH CAROLINA REGISTER 



701 



PROPOSED RULES 



.0603 CRITERIA FOR LOAN ADJUSTMENTS 

(a) Upon receipt of bids the debt instrument is 
negotiated. It may adjust the loan commitment 
as follows: 

(1) The loan commitment may be decreased, 
provide the project cost as bid is less than 
the estimated project cost, and the receiv- 
ing agency approves the loan commitment 
decrease. 

(2) Loan commitments may be increased, to 
a maximum of 10 percent or five thousand 
dollars ($500,000), whichever is greater, 
provided; 

(A) the project cost as bid is greater than 
the estimated project cost; 

(B) the project as bid is in accordance with 
the project for which the loan commit- 
ment was made; 

(C) the receiving agency has reviewed the 
bids and determined that substantial cost 
savings would not be available through 
project revisions without jeopardizing the 
integrity of the project; and 

(D) adequate funds are available in the ac- 
count from which the loan was awarded. 

Increases greater than 10 percent of the loan 
commitment shall be approved by the Local 
Government Commission and the Office of State 
Budget and Management. 

Statutory Authority G.S. I59G-12; 159G-I5. 

.0604 DISBLRSEMENT OF LOANS 

(a) Disbursement of loan monies shall be made 
at inter\'als as work progresses and expenses are 
incurred. No disbursement shall be made until 
the receiving agency receives satisfactory doc- 
umentation of incurred costs. At no time shall 
disbursement exceed the allowable costs which 
have been incurred at that time. 

(b) Project inspection will confirm work 
progress, and a fmal inspection is required prior 
to fmal disbursement of loan monies. 

(c) The receiving agency will notify the Office 
of State Budget and Management to make loan 
disbursements. A check in the amount of the 
disbursement authorized by the receiving agency 
will be forwarded to the loan recipient by the 
OtTice of State Budget and Management. The 
receiving agency will be notified by the Office of 
State Budget and Management as disbursements 
are made. 

Statutory Authority G.S. /59G-5(c): I59G-I2: 
I59G-I5. 

.0605 TERMINATION OF LOANS 



Loan commitments may be terminated by the 
Environmental Management Conmiission when 
recipients do not meet project schedules, if they 
fail to award contracts within one year, or if they 
fail to comply with applicable Federal require- 
ments. 

Statutory Authority G.S. l59G-5(c); I59G-II- 
I59G-I5. 

SECTION .0700 - LOAN REPAYMENTS 

.0701 INTEREST RATES 

The interest rate to be charged on loans under 
this Chapter will be set on March 3 1 of each year 
at the lesser of four percent per annum or one- 
half the prevailing national market rate as derived 
from the Bond Buyer's 20- Bond Index in ac- 
cordance with G.S. 159G-4(c). The interest rate 
will be the same for all loans awarded from this 
account during any given fiscal year. 

Statutory Authority G.S. J59G-4(cJ; J59G-5(c); 
I59G-15. 

.0702 REPAYMENT OF PRINCIPAL AND 
INTEREST ON LOANS 

(a) The debt instrument setting the terms and 
conditions of repayment of loans under this 
Chapter will be established after the receipt of 
bids. Adjustments to the loan may only be made 
under Rule .0603 of this Chapter. 

(b) The maximum maturity on any loan under 
this Chapter shall not exceed 20 years. 

(c) Interest on the debt instrument shall begin 
to accrue on the original date that a project's 
contracts are scheduled to be completed. Ex- 
tensions of this deadline are not allowed. 

(d) All principal payments will be made armu- 
aUy on or before May 1. The first principal 
payment is due not earlier than six months after 
the date of completion of the project. 

(e) All interest payments wiU be made semian- 
nually on or before May 1 and November 1 of 
each year. The first interest payment is due not 
earlier than six months after the date of com- 
pletion of the project. 

(f) All principal and interest payments shall be 
made payable to the Water PoUution Control 
Revolving Fund, and submitted to the Office of 
State Budget and Management. 

Statutory Authority G.S. J59G-/3; J59G-J5; 
I59G-I8. 

SECTION .0800 - INSPECTION AND ALDIT 

.0801 INSPECTION 



702 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



Inspection of a project to which a loan has been 
committed under this Chapter may be made to 
determine the percentage of completion of the 
project for installment disbursements, conform- 
ance with approved plans and specifications, and 
for compliance with all applicable laws and rules. 

Statutory Authority G.S. I59G-14; I59G-15. 

.0802 AUDIT OF PROJECTS 

(a) Loan recipients are required to maintain 
project accounts in accordance with generally 
accepted government accounting standards. 

(b) .\11 projects to which a loan has been 
committed under this Chapter will be audited in 
accordance with G.S. 159-34. 

Statutory Authority G.S. l59G-5(c); I59G-I5. 



1\ otice is hereby gi\'en in accordance with G.S. 
I SOB- 1 2 that the Division of Coastal Management 
intends to adopt rule(s) cited as 15 NCAC 7H 
.1901 - .1905. 

1 he proposed effective date of this action is 
March I, I9S9. 

1 he public hearing will be conducted at 10:00 
a.m. on December 1 , I9SS at The North Carolina 
Aquarium, Roanoke Island, Airport Road, 
Manteo, N.C. 

(^ omment Procedures: A II persons interested in 
this matter are im'iled to attend the public hearing. 
The Coastal Management Division will receive 
written comments up to the date of the hearing. 
Any person desiring to present lengthy comments 
is requested to submit a written statement for 
inclusion in the record of proceedings at the public 
hearing. Additional information concerning the 
hearing or the proposal may be obtained by con- 
tacting Portia Rochelle, Division of Coastal Man- 
agement, P.O. Box 27687, Raleigh, NC 27611, 
(919) 733-22S3. 

CHAPTER 7 - COASTAL MANAGEMENT 

SUBCHAPTER 7H - STATE GUIDELINES FOR 
AREAS OF ENVIRONMENTAL CONCERN 

SECTION .1900 - GENERAL PERMIT TO 

ALLOW FOR TEMPORARY STRUCTURES 

WITHIN ESTUARINE AND OCEAN HAZARD 

AECS 

.1901 PURPOSE 



This permit will allow for the placement of 
temporary structures within estuarine and ocean 
hazard AEC's according to the provisions pro- 
vided in Subchapter 7J .1100 and according to 
the guidelines in this Subchapter. 

Statutory Authority G.S. Il3-229(cl); 
II3A-I07(a)(b); ll3A-II3(b); II3A-118.I. 

.1902 APPROVAL PROCEDURES 

(a) The applicant must contact the Division of 
Coastal Management and complete a general 
permit application form requesting approval for 
development. Applicants shall provide informa- 
tion on site location, dimensions of the project 
area, proposed activity, name, address, and tele- 
phone number. 

(b) The applicant must provide confirmation 
that a written statement has been obtained, 
signed by the adjacent riparian property owners, 
indicating that they have no objections of the 
proposed work. 

(c) No work shall begin until an onsite meeting 
is held with the applicant and a Division of 
Coastal Management representative to inspect 
and mark the site of construction of the proposed 
development. Written authorization to proceed 
with the proposed development may be issued 
by the division during this visit. All work must 
be completed and the structure removed within 
1 80 days following the day written authorization 
is issued. 

Statutory Authority G.S. 113-229(cl); 
II3A-I07(a)(b); II3A-1 13(b); II3A-II8.I. 

.1903 PERMIT FEE 

No fee will be assessed for this permit. 

Statutory Authority G.S. 113-229(cl); 
Il3.4-107(a)(b); II3A-I13(b): I13A-II8.I. 

.1904 GENERAL CONDITIONS 

(a) Temporar)' structures for the purpose of 
this general permit are those which are con- 
structed within the ocean hazard or estuarine 
system AEC's and because of dimensions or 
functions do not meet the criteria of the existing 
general permits (i.e. are not a bulkhead, pier, 
rip-rap, groin, etc.). 

(b) There must be no encroachment ocean ward 
of the first line of stable \egetation within the 
ocean hazard AEC by the structure. 

(c) There can be no fill activity below the plane 
of mean high water associated with the structure. 

(d) The structure must not be located in such 
a manner that will directly or indirectly adversely 
impact coastal wetlands. 



NORTH CAROLINA REGISTER 



703 



PROPOSED RULES 



(e) The structure must not disrupt the move- 
ment of those species of aquatic life indigenous 
to the waterbody. 

(f) Individuals shall allow authorized represen- 
tatives of the Department of NRCD to make 
periodic inspections at any time necessary to en- 
sure that the activity being performed under au- 
thority of this general permit is in accordance 
with the terms and conditions prescribed herein. 

(g) This general permit may either be amended 
or repealed in whole or in part according to the 
provisions of G.S. 113A-107 if the conmiission 
determines that such action would be in the best 
public interest. 

(h) This general permit will not be applicable 
to proposed structures when the department de- 
termines that the proposed activity may signif- 
icantly affect the quality of the environment or 
unnecessarily endanger adjoining properties. 

(i) This general permit wiU not be apphcable 
to proposed structures when the department de- 
termines that the proposed activity would ad- 
versely affect areas which possess historic, 
cultural, scenic, conversation or recreational val- 
ues. 

(j) The department may determine in some 
cases that tliis general permit is not applicable to 
a specific structural proposal. In such cases an 
indi\'idual permit application and review of the 
proposed project may be initiated using the ap- 
plication forms, fees, and procedures required by 
15 NCAC 7J. 

(k) This permit does not eliminate the need to 
obtain any other state, local or federal authori- 
zation, nor, to abide by regulations adopted by 
any federal or other state agency. 

(1) Development carried out under this permit 
must be consistent with aU local requirements, 
AEC guidelines, and local land use plans current 
at the time of authorization. 



(4) The proposed activity must not involve the 
disruption of normal navigation and trans- 
portation charmels. 

(5) The proposed project must not serve as a 
habitable place of residence. 

(6) There will be no adverse disturbance of ex- 
isting dune structures. 

Statutory Authority G.S. II3-229(cl); 
II3A-I07(a)(b); II3A-Il3(b); II3A-1I8.I. 

TITLE 21 - OCCUPATIONAL LICENSING 
BOARDS 



ly otice is hereby given in accordance with G.S. 
J 508- J 2 that the North Carolina State Board of 
Dental Examiners intends to adopt rule(s) cited 
as 21 NCAC I6Q .0101 - .0501. 

1 he proposed effective date of this action is July 
I, 1989. 



1 he public hearing will be conducted at 10:00 
a.m. on December 9, I9SS at Offices of the North 
Carolina State Board of Dental Examiners, 3716 
National Dri\'e, Suite 221, Raleigh, North 
Carolina. 

\^ omment Procedures: Any person interested in 
these rules may present oral comments relevant to 
the proposals at the public hearing or deliver 
written comments to the board prior to January 
9, 1989. .Anyone wishing to address the board at 
the public hearing should notify the board by noon 
on December 8, J 988, that they wish to speak on 
the proposals. Oral presentations will be limited 
to frve minutes per speaker. The board's mailing 
address is: Post Office Box 32270, Raleigh, 
North Carolina 27622-2270. 



Statutory: Authority G.S. 1 13-229(cl ); 
]13A-107(a)(b): 113A- 113(b): 113A-I18.1. 

.1905 SPECIFIC CONDITIONS 

Proposed temporary structures must meet each 
of the following specific conditions to be eligible 
for authorization by the general permit: 

(1) All aspects of the structure must be re- 
moved from the site at the termination of 
this general pennit and full restoration ac- 
complished. 

(2) There can be no work within any produc- 
tive shellfish beds. 

(3) The proposed project must not involve the 
excavation of any marsh, submerged aquatic 
vegetation, or other wetlands. 



CHAPTER 16 - DENTAL EXAMJNERS 

SUBCHAPTER 16Q - GENERAL ANESTHESIA 

SECTION .0100 - DEFINITIONS 

.0101 PURPOSE 

For the purposes of these rules relative to the 
administration of general anesthesia and sedation, 
by or under the direction of a licensed dentist, the 
following definitions shall apply: 
(1) "General .'Vnesthesia" is the intended con- 
trolled state of depressed consciousness 
produced by a pharmacologic agent and ac- 
companied by a partial or complete loss of 
protective refle.xes including the inability to 
maintain an airway and respond 



704 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



purposefully to physical stimulation or 
verbal command. 

(2) "Sedation" is the intravenous, intramuscu- 
lar, subcutaneous, submuscosal, or rectal 
administration of pharmacological agents, 
with the intent to obtain a depressed level 
of consciousness that retains the patient's 
ability to independently and continuously 
maintain an airway and respond appropri- 
ately to physical stimulation or verbal com- 
mand. 

(3) "Nitrous Oxide Inhalation Conscious Se- 
dation (Dental Analgesia)" is the adminis- 
tration by inhalation of a combination of 
nitrous oxide and oxygen produced with an 
intent to obtain an altered level of con- 
sciousness that retains the patient's ability to 
independently and continuously maintain an 
airway and respond appropriately to phys- 
ical stimulation or verbal command. 

(4) "Local Anesthesia" is the loss of sensation 
of pain in a specific area of the body gener- 
ally produced by a topically applied agent 
or an injected agent without intentionally 
affecting the level of consciousness. 

Statutory Authority G.S. 90-28. 

SECTION .0200 - TIMETABLE FOR 
REGULATIONS 

.0201 GENERAL ANESTHESIA 

Twenty-four months after the effective date of 
these rules and regulations, a dentist licensed in 
this state shall have the right to administer or di- 
rect the administration of general anesthesia in 
the practice of dentistry if that dentist has met the 
requirements for administration of general anes- 
thesia as specified by the State Board of Dental 
Examiners. 

Statutory Authority G.S. 90-28. 

.0202 SEDATION 

Twenty-four months after the effective date of 
these rules and regulations, a dentist licensed in 
this state shall have the right to administer or di- 
rect the administration of sedation in the practice 
of dentistry if that dentist has met the require- 
ments for administration of sedation as required 
by the State Board of Dental Examiners. 

Statutory Authority G.S. 90-28. 

SECTION .0300 - CREDENTIALS NECESSARY 

FOR ADMINISTRATION OF GENERAL 

ANESTHESIA AND SEDATION 

.0301 GENERAL ANESTHESIA CREDENTIALS 



Credentials may be satisfied by a licensed dentist 
to use general anesthesia on an outpatient basis 
for dental patients provided the dentist meets the 
following criteria as outlined below: 

(1) Required Criteria: 

(a) The dentist has completed a minimum of 
one year of advanced training or the 
equivalent in anesthesiology and related 
academic subjects beyond the undergrad- 
uate dental school level in a training pro- 
gram approved by the board; or 

(b) Any individual who is a graduate of an 
ADA certified program in oral and 
maxillofacial surgery or as diplomate of 
the American Board of Oral and 
Maxillofacial Surgery, or is eligible for ex- 
amination by the American Board of Oral 
and Maxillofacial Surgery, has by defi- 
nition met the requirements to administer 
general anesthesia. 

(c) Is a Fellow of the American Dental Soci- 
ety of Anesthesiology; or 

(d) Is a licensed dentist who has been utilising 
general anesthesia in a competent manner 
for the five years preceding the effective 
date of this Rule and who passes an on- 
site examination and inspection of office 
facilities by qualified representatives of the 
North Carolina State Board of Dental 
Examiners. 

(e) The dentist may have the preanesthetic 
evaluation and anesthetic administration 
done by a qualified anesthesiologist li- 
censed to practice in North Carolina. The 
anesthesiologist would monitor the pa- 
tient until discharge from the dental office. 
The anesthesiologist and the dentist 
would be responsible for insuring the 
standard of care for the dental office to the 
North Carolina State Board of Dental 
Examiners. 

(f) A dentist qualified to administer general 
anesthesia may have the anesthesia ad- 
ministered in collaboration with a certified 
nurse anesthetist. The dentist and the 
nurse anesthetist would be responsible for 
insuring standard of care for the dental 
office to the State Board of Dental Ex- 
aminers. 

(2) A dentist using general anesthesia shall 
maintain a properly equipped facility for the 
administration of general anesthesia staffed 
with supervised auxiliary personnel. The 
clinical persormel shall have the capacity to 
effectively manage the procedure, as well as 
any problems or emergency incidents that 
may occur as result of the general anesthetic 



NORTH CAROLINA REGISTER 



705 



PROPOSED RULES 



or secondary to an unexpected medical 
complication. 

(3) A dentist and his auxiliary personnel using 
general anesthesia shall be trained in and 
capable of administering basic life support. 

(4) A dentist qualified to administer general 
anesthesia under this Rule may administer 
sedation under Rule .0302. 

Statutory Authority G.S. 90-28. 

.0302 SEDATION CREDENTIALS 

Credentials may be satisfied by a licensed dentist 
to use sedation on an outpatient basis on dental 
patients provided the dentist meets the following 
criteria: 

(1) The dentist has received formal training and 
certification in a program approved by the 
State Board of Dental Examiners which in- 
cluded physical evaluation, I.V. sedation, 
airway management, monitoring basic life 
support, and emergency training hours as 
well as the amount of didactic and patient 
contact hours invohed in his or her training. 
The minimum number of didactic hours will 
be 60 hours. The minimum number of pa- 
tient contact hours will be 20 hours to in- 
clude a minimum of 10 patients. The 
formal training program shall be sponsored 
by or atTiliated with a university, a teaching 
hospital, an organization, or be a part of the 
undergraduate curriculum of an accredited 
dental school. Any sponsoring organization 
not affiUated with a university or teaching 
hospital shall be approved by the State 
Board of Dental Examiners. 

(2) The dentist may have the presedation eval- 
uation and the sedation administration done 
by a quahfied anesthesiologist licensed to 
practice in North Carolina. The 
anesthesiologist would monitor the patient 
until f'ischarge from the dental office. The 
anesthesiologist and the dentist would be 
responsible for insuring the standard of care 
for the dental office to the North Carolina 
Board of Dental Examiners. 

(3) A dentist qualified to administer sedation 
may have the sedation administered in col- 
laboration with a certified nurse anesthetist. 
The dentist and the anesthetist would be re- 
sponsible for insuring standard of care for 
the dental office to the North Carolina 
Board of Dental Examiners. 

(4) A dentist administering sedation shall 
maintain a properly equipped facility for the 
administration of sedation staffed with 
supervised au,xiliar>' personnel. The clinical 
personnel shall be capable of reasonably 



handling procedure, problems, and emer- 
gencies incident thereto. 

(5) A dentist administering sedation and his 
auxiliary personnel shall be proficient in 
basic Ufe support. 

(6) A dentist who has been administering se- 
dation on an outpatient in a competent and 
efficient manner for the three years preceding 
the effective date of these rules and regu- 
lations who has not had the benefit of 
formal education as outlined in these rules 
may continue use, provided the dentist ful- 
fills the provisions set forth in Paragraphs 
(d) and (e) of this Rule. 

Statutory Authority G.S. 90-28. 

.0303 NITROUS OXIDE INHAL.\TION 

CONSCIOUS SED.^TION (DENTAL 
ANALGESIA) CREDENTIALS 

There will be no additional requirements or 
credentials necessary for a licensed dentist in 
North Carolina to administer nitrous oxide 
inhalation conscious sedation. 

Statutory Authority G.S. 90-28. 

.0304 LOCAL ANESTHESIA CREDENTIALS 

There will be no additional requirements or 
credentials necessary for a licensed dentist in 
North Carolina to administer local anesthesia. 

Statutory Authority G.S. 90-28. 

SECTION .0400 - METHOD OF 
CREDENTIALING 

.0401 REVIEW OF CREDENTIALS 

No dentist shall use or assume responsibility for 
the use of general anesthesia or sedation in a 
dental office of dental patients unless the dentist 
has met the qualifications required by the North 
Carolina Board of Dental Examiners. Dentists 
so qualified shall be subject to review and their 
facilities subject to inspection by members or 
representatives of the board as deemed appropri- 
ate by the board. Credentials must be reviewed 
biannuaUy. Continuing education is encouraged: 
(1) Within one year of the effective date of 
these rules, each dentist who has been ad- 
ministering or responsible for the adminis- 
tration of general anesthesia shall submit 
credentials on the appropriate form to the 
North Carolina Board of Dental Examiners 
if that dentist desires to continue to admin- 
ister or be responsible for the administration 
of general anesthesia to dental patients on 
an outpatient basis. This form must include 
a fee of one hundred thirty dollars ($130.00) 



706 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



as well as evidence indicating compliance 
with Section .0300 - General Anesthesia 
Credentials. Prior to the acceptance of cre- 
dentials, the board may, at its discretion, re- 
quire an on-site inspection of facilities, 
equipment, personnel, and procedures to 
determine if the requirements have been 
met. This evaluation shall be carried out 
by the board or by a team of consultants 
appointed by the board. 

(2) Within one year of the effective date of 
these rules, each dentist who has been ad- 
ministered or responsible for the adminis- 
tration of sedation shall submit credentials 
on the appropriate form to the North 
Carohna Board of Dental Examiners if that 
dentist desires to continue to administer or 
be responsible for the administration of se- 
dation to dental patients on an outpatient 
basis. The form must be accompanied by a 
one hundred thirty dollars ($130.00) fee as 
well as evidence of compliance with Section 
.0400 - Sedation Credentials. Prior -to the 
acceptance of credentials, the board may, at 
its discretion, require an on-site inspection 
of facilities, equipment, personnel, and pro- 
cedures to determine if the requirements 
ha\e been met. This evaluation shall be 
carried out by the board or by a team of 
consultants appointed by the board. 

(3) Temporary approval may be granted for the 
new applicant based solely on credentials 
until all processing and investigation have 
been completed. Temporary approval shall 
not exceed 12 months. 

(4) Biannual approval of credentials will be 
considered following submission of the 
proper form and may involve board reeval- 
uation of credentials, facilities, equipment, 
personnel, and procedures of a previously 
qualified dentist to determine if the dentist 
is still qualified. A renewal fee of fifty dol- 
lars ($50.00) must accompany this form. 

Statutory Authority G.S. 90-28. 

SECTION .0500 - REPORTS REQUIRED 

.0501 REPORTS REQUIRED 

All licensed dentists engaged in the act or prac- 
tice of dentistry while administered general anes- 
thesia or sedation must submit a report within a 
30 day period to the North Carolina Board of 
Dental Examiners regarding any known mortality 
or serious unusual incident which occurs in a 
dental facility or during the 24 hour period after 
the patient leaves the facility, if the incident 
produces temporary or permanent physical or 



mental injury of the patient as a direct resuh of 
the administration of general anesthesia or se- 
dation. 

Statutory Authority G.S. 90-28. 



IS otice is hereby given in accordance with G.S. 
I SOB- 1 2 that the North Carolina Board of Nurs- 
ing intends to adopt rule(s) cited as 21 NCAC 36 
.0401 -.0404. 

1 he proposed effective date of this action is 
March 1, 1989. 

1 he public hearing will be conducted at 10:00 
a.m. on December 1, 1988 at Plaza Hotel, 
Raleigh, North Carolina. 

K^-omment Procedures: Any person wishing to 
present oral testimony relevant to proposed rules 
may register at the door before the hearing begins 
and present hearing officer with a written copy of 
testimony. Written statements may be directed 
five days prior to the hearing date to the North 
Carolina Board of Nursing, P.O. Box 2129, 
Raleigh, N.C. 27602. 

CHAPTER 36 - BOARD OF NURSING 

SECTION .0400 - UNLICENSED PERSONNEL - 
NURSE AIDES 

.0401 ROLES 

(a) The license nurse. Registered and Practical, 
may delegate nursing care activities to unlicensed 
personnel, regardless of title, appropriate to the 
level of knowledge and skill of the unlicensed care 
provider, and which are within the legal scope of 
practice for unlicensed persormel. The licensed 
nurse is responsible for supervision of the unli- 
censed personnel and maintains legal account- 
ability and responsibility for nursing care given 
by all personnel to whom that care is delegated. 

(b) Those activities which may be delegated to 
unlicensed personnel are determined by the fol- 
lowing variables: 

(1) educational preparation of the unlicensed 
care provider which includes both basic 
educational preparation (Level I) and 
training added through additional educa- 
tional preparation and training (Level II); 

(2) verification of clinical competence of the 
unlicensed care provider; 



NORTH CAROLINA REGISTER 



707 



PROPOSED RULES 



(3) stability of the patient's clinical condition 
which involves predictability, risk of 
complication, and rate of change, and 
thereby: excludes delegation of nursing 
care activities which require nursing 
assessment/judgement by a licensed nurse 
during the performance of the activity; 

(4) the unlicensed care provider's knowledge 
and skill; 

(5) the variables in each service setting which 
include but are not limited to; 

(A) the complexity and frequency of nurs- 
ing care needed by a given patient popu- 
lation; 

(B) the proximity of patients to staff; 

(C) the number and qualifications of staff; 

(D) the accessible resources; and 

(E) established policies, procedures, prac- 
tices, and channels of communication 
which lend support to types of nursing 
activities being delegated, or not delegated, 
to unlicensed personnel. 



Statutory Authority G.S. 
(4) (5) (7): 90-17143(4). 



90-l7I.20(b)(f)(g) 



.0402 QUALIFICATIONS 

(a) As of January 1, 1990, a service agency shall 
not use any unlicensed individual, regardless of 
title, who provides nursing care activities, as de- 
fmed in .0404 of these rules, to patients/residents 
for longer than the first four months following 
initial hiring, who has not successfuUy completed 
a Board of Nursing approved nurse aide training 
and competency evaluation program or a board 
approved competency evaluation program, un- 
less the facility has inquired of the Board of 
Nursing as to information in the Nurse Aide 
Registry' concerning the individual and has con- 
firmed with the Board of Nursing that the indi- 
vidual is listed on the Nurse Aide Registry. 

(b) As of the date that these rules are effective, 
service agencies shall not use for longer than one 
month, any unlicensed individual at the Nurse 
Aide Level II, who has not successfully com- 
pleted a Board of Nursing approved Level II 
nurse aide training and competency evaluation 
program, unless the facility has inquired of the 
Board of Nursing as to information in the Nurse 
Aide Registry' concerning the individual and 
confirms with the Board of Nursing that the in- 
dividual is listed on the Nurse Aide Registry as a 
Nurse Aide, Level II. 

Statutory Authority G.S. 90-171 .20(b){f)(g) 
(4)(5)(7); 90-17143(4). 

.0403 REGISTR.ATION 



(a) As of the date that these rules are effective, 
the Board of Nursing shall maintain a list of 
nurse aides who are qualified in accordance with 
the requirements of .0402 of these rules in the 
Nurse Aide Registry. 

(b) All nurse aides, regardless of working titles, 
employed or assigned in a service agency for the 
purpose of providing nursing care activities, upon 
successful completion of a nurse aide training and 
competency evaluation program or a nurse aide 
competency evaluation program shall submit an 
application to the Board of Nursing for place- 
ment on the Nurse Aide Registry. 

(c) A nurse aide that has completed, before 
July 1, 1989, a nurse aide training and compe- 
tency evaluation program, shall successfully 
complete a board-approved competency evalu- 
ation program and shall submit an application to 
the Board of Nursing for placement on the Nurse 
Aide Registry. 

(d) Each nurse aide shall renew his/her regis- 
tration on a biennial basis on forms provided by 
the board. 

(e) ."Vny nurse aide who has had a continuous 
period of 24 months during which no nursing 
care activities were performed for monetary 
compensation, shall successfully complete a new 
training and competency evaluation program and 
submit an application for the Nurse Aide Regis- 
try. 

(f) The state agency responsible for surveys, 
licensure, and certification of facilities and any 
other agency responsible for investigation com- 
plaints related to nurse aides, shall notify the 
Board of Nursing, following a timely review and 
investigation of allegations of patient/resident 
neglect and abuse and misappropriation of resi- 
dent property, if the agency determines that the 
nurse aide has neglected or abused a 
patient/resident or misappropriated resident 
property within 10 business days of such deter- 
mination; 

The investigating agency's findings indi- 
cating a nurse aide has neglected or 
abused a patient/resident or misappropri- 
ated resident property shall be available to 
the public upon inquiry' to the Nurse Aide 
Registry. Any information disclosed 
concerning such a fmding shall include 
disclosure of the fmdings and if the indi- 
vidual has disputed the fmdings. 



Statutory Authority G.S. 
(4)(5)(7): 90-17143(4). 



90-17 1. 20(b) (f)(g) 



.0404 APPROVAL OF NURSE AIDE 
EDUCATION PROGRAMS 



708 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(a) The North Carolina Board of Nursing shall 
approve nurse aide training and competency 
evaluation programs and nurse aide competency 
evaluation programs which prepare two levels of 
nurse aides: 

(1) Nurse aide training and competency eval- 
uation programs and nurse aide compe- 
tency evaluation programs may be offered 
by an individual, agency, or educational 
institution once the program is approved 
by the board: 

(A) Each entity desiring to offer a nurse 
aide training and competency evaluation 
program or competency evaluation pro- 
gram shall submit the program for ap- 
proval at least 60 days prior to offering the 
program. 

(B) Nurse aide training and competency 
evaluation programs and competency 
evaluation programs shall be submitted 
for reapproval when the program is 
changed substantially, or at least every 
two years. 

(C) The Board of Nursing representatives 
may survey nurse aide training and com- 
petency evaluation programs, competency 
evaluation programs, and associated clin- 
ical ser\'ice agencies to determine the pro- 
gram's compliance with the requirements 
of the board. 

(D) The Board of Nursing may approve a 
nurse aide training and competency eval- 
uation program or nurse aide competency 
evaluation program which is approved by 
another state agency, if the Board of 
Nursing has reviewed the state agency's 
process and criteria of approval of nurse 
aide education programs and determines 
the process and criteria ensure that the 
Board of Nursing's requirements are met. 

(2) The board shall identify and publish the 
minimum course content, minimum 
hours of instruction (not less than 75 
hours), and retraining requirements for 
Level I and Level II nurse aides education 
programs on an annual basis. 

(3) Each Nurse Aide Level I course must in- 
clude: 

(A) Basic nursing skills; 

(B) Personal care skills; 

(C) Recognition of mental health and social 
service needs; 

(D) Basic restorative services; 



(E) Resident's rights; 

(F) Body mechanics; 

(G) Nutrition; 
(H) Elimination; 
(I) Safety; 

(J) Communication and documentation; 
(K) Special procedures; 
(L) Roles of members of the Health Care 
Team. 

(4) Each Nurse .\ide Level II course must 
include content identified as appropriate 
for the Level II Nurse Aides by the Board 
of Nursing. 

(5) Each competency evaluation program 
shall include content to verify the know- 
ledge and skills of the nurse aide who 
successfully completes the course as being 
comparable for the appropriate level of 
nurse aide. 

(6) The board shall identify and publish min- 
imum competencies and qualifications for 
faculty on an annual basis for Nurse Aide, 
I^vel I and Level II Training and Com- 
petency Evaluation Programs and Com- 
p)etency Evaluation Programs. 

(7) Each Nurse Aide Training and Compe- 
tency Program and each Competency 
Evaluation Program shall fde with the 
board such records, data, and reports as 
may be required in order to furnish infor- 
mation concerning operation of the pro- 
gram as required by the board and 
concerning any individual who success- 
fully completes the program. 

(8) When an approved nurse aide training and 
competency evaluation program or a 
competency evaluation program closes, 
the board shall be notified in writing. 

(9) Nursing students currently enrolled in 
Board of Nursing approved nursing pro- 
grams desiring registration as a nurse aide 
shall submit: 

(A) An application, and 

(B) Verification form completed by the 
nursing program director indicating suc- 
cessful completion of course work equiv- 
alent in content and clinical hours as 
required for a nurse aide. 



Statutorv Authority G.S. 
(4)(5)(7); 90-171.43(4). 



90-l71.20(b)(f)(g) 



NORTH CAROLINA REGISTER 



709 



FINAL RULES 



LJ port request from the adopting agency, the 
text of rules will be published in this section. 



W hen the text of any adopted rule is iden- 
tical to the text of that as proposed, adoption 
of the rule will be noted in the "List of Rules 
Affected" and the text of the adopted rule 
will not be republished. 

/i. dopted rules filed by the Departments of 
Correction. Re\enue and Transportation are 
published in this section. These departments 
are not subject to the provisions ofG.S. J 508, 
Article 2 requiring publication of proposed 
rules. 



TITLE 17 DEPARTMENT OF REVENUE 

CHAPTER 6 - INDIVIDUAL INCOME TAX 
DIVISION 

SUBCHAPTER 6B - INDIVIDUAL INCOME TAX 

SECTION .0300 - PERSONAL EXEMPTION 

.0301 GENERAL 

G.S. 105-149 provides the personal exemptions 
for individuals. 

History \ote: Statutory Authority G.S. 
105-149: 105-262; 
Eff February I, 1976: 
Amended Eff. November 1 , 19S8: 
April 19, 1 98 1. 

.0302 ONE THOUSAND ONE HUNDRED 
DOLLAR PERSONAL EXEMPTION 

Each individual (with the exception of one who 
moves into or out of North Carolina, or who 
resides outside of North Carolina and derives 
only a portion of his income in North Carolina) 
is entitled to at least a one thousand one hundred 
dollar ($1,100) personal exemption. 

History Note: Statutory Authority G.S. 
105- i 49: 105-262: 
Eff February 1, 1976: 
Amended Eff. November 1 , I9S8. 

.0303 TWO THOUSAND TWO HUNDRED 
DOLLAR PERSONAL EXEMPTION 

(a) An individual may claim only one two 
thousand two hundred dollars ($2,200) basic 
personal exemption even though he may meet 
more than one set of qualifications. 



(b) In the case of a married couple living to- 
gether on the last day of the year the spouse with 
the larger adjusted gross income is allowed a two 
thousand two hundred dollars ($2,200) ex- 
emption and the other spouse a one thousand 
one hundred dollars ($1,100) exemption. By 
agreement the spouse with the smaller adjusted 
gross income may claim the two thousand two 
hundred dollars ($2,200) exemption if the other 
spouse files a return and claims only one thou- 
sand one hundred dollars ($1,100). If one spouse 
dies during a taxable year, the spouse with the 
larger adjusted gross income for that year will be 
allowed two thousand two hundred dollars 
($2,200) exemption except that if a return claim- 
ing one thousand one hundred dollars ($1,100) 
exemption is filed for the spouse with the larger 
adjusted gross income, the other spouse may 
claim the two thousand two hundred dollars 
($2,200) exemption. 

The exemption of the two spouses may not be 
combined and neither spouse may claim a de- 
pendency exemption for the other spouse. 

A married individual who is otherwise entitled 
to claim two thousand two hundred dollars 
($2,200) exemption will not be denied such ex- 
emption because of temporary separation of the 
two spouses for such reasons as military service, 
fmancial reasons, or other expediencies. 

A common law marriage is not recognized in 
North Carolina for income tax purposes; there- 
fore, a man and woman living together as com- 
mon law husband and wife are not entitled to the 
two thousand two hundred dollars ($2,200) ex- 
emption allowed to a married couple, except 
when a man and woman move into this state 
from a state which recognized their common law 
marriage and who continue to live together as 
common law man and wife after becoming North 
Carolina residents. 

(c) To qualify for her two thousand two hun- 
dred dollars ($2,200) widow's exemption, the 
widow is not required to have custody of the 
child nor to provide support for the child. If 
support is provided for the child and if the child 
qualifies as a dependent by meeting the require- 
ments of 17 NCAC 6B .0308, the widow may 
claim the dependency exemption in addition to 
the widow's two thousand two hundred dollars 
($2,200) exemption. When a widow's child is 
under 18 years of age at the beginning of the year 
but is over 18 on the last day of the year the 
widow's two thousand two hundred dollars 
($2,200) exemption may not be claimed even 
though the child's birthday is in the last half of 
the year. The widow may, however, be entitled 
to the two thousand tw'o hundred dollars 
($2,200) head of household exemption if the re- 



710 



NORTH CAROLINA REGISTER 



FINAL RULES 



quirements of Subdivision (f) of this Rule are 
met for the major part of the year. 

(d) A widower having a minor child has the 
same exemption as a widow. 

(e) A divorced individual having sole custody 
of his or her minor child (a child under 18 years 
of age) may claim the two thousand two hundred 
dollars ($2,200) personal exemption provided the 
divorced individual does not receive any alimony 
payments for the support of herself or himself 
and does not receive any support payments for 
the child or children. If the divorced individual's 
two thousand two hundred dollars ($2,200) ex- 
emption is denied because of the receipt of either 
alimony or child support payments, the divorced 
individual may still qualify for the two thousand 
two hundred dollars ($2,200) head of household 
exemption if the requirements of Subdivision (f) 
of this Rule are met. 

An individual does not have to be legally di- 
vorced to be considered a divorced individual for 
income tax exemption purposes. Estranged 
couples separated with the intent to remain sep- 
arate and apart are considered for personal ex- 
emption purposes to be divorced individuals. 

(f) A personal exemption of two thousand two 
hundred dollars ($2,200) as head of household 
exemption may be claimed by a single individual, 
a widow, a widower, or a divorced individual 
who maintains a household which constitutes the 
principal place of abode for himself, herself, or 
his or her closely related dependent provided the 
following conditions are met: 

(1) The individual must have provided more 
than half the cost of maintaining the 
household for the year. 

(2) The household must have been the prin- 
cipal place of abode for the individual or 
his or her closely related dependent for 
183 days or more during the year. 

(3) The household must have been a place of 

abode having those facilities normally re- 
quired for both eating and sleeping. 

The closely related dependent must be one of 
those individuals listed at 17 NCAC 6B 
.0308(a)(3)(A) for whom a eight hundred dollars 
($800.00) dependency exemption is allowable. 

The cost of maintaining a household includes 
the expenses incurred for the benefit of the oc- 
cupant or for the mutual benefit of the occupants 
thereof by reason of its operation as the principal 
place of abode of the occupant or occupants for 
the taxable year. These expenses include prop- 
erty taxes, mortgage interest, rent, upkeep and 
repairs, utility charges, domestic help, insurance 
on the dwelling and premises, and food con- 
sumed in the home. 

The cost of maintaining a household does not 
include the cost of clothing, education, medical 



treatment, vacations, life insurance, transporta- 
tion, rental value of the taxpayer's home or the 
value of his service or those of a member of his 
household. 

Only one head of household exemption is al- 
lowable with respect to any one household, and 
no individual is entitled to more than one head 
of household exemption. A head of household 
exemption cannot be claimed based on a multi- 
ple maintenance agreement. 

When an individual marries during the year after 
having qualified as a head of household for the 
major portion of the year ( 1 83 days) and has the 
smaller adjusted gross income of the married 
couple, he or she is entitled to the two thousand 
two hundred dollars ($2,200) head of household 
exemption and the other spouse is entitled to the 
two thousand two hundred dollars ($2,200) ex- 
emption allowed for the spouse of the marriage 
having the larger adjusted gross income. If the 
spouse who qualified as the head of household 
for the major portion of the year has the larger 
adjusted gross income, that spouse is entitled 
only to the two thousand two hundred dollars 
($2,200) married person's exemption and if he 
or she by agreement allows the other spouse to 
claim the two thousand two hundred dollars 
($2,200) married person's exemption, then the 
spouse with the larger adjusted gross income is 
entitled to only a one thousand one hundred 
dollars ($1,100) personal exemption and is not 
entitled to the two thousand two hundred dollars 
($2,200) head of household exemption. When a 
married individual dies before the major portion 
of the year has passed and he or she has the larger 
adjusted gross income of the married couple, he 
or she is entitled to the two thousand two hun- 
dred dollars ($2,200) married person's exemption 
and the other spouse may be entitled to the two 
thousand two hundred dollars ($2,200) head of 
household exemption provided the other spouse 
maintained a household for 183 days or more 
during the year after his or her spouse died. If 
the surviving spouse who qualified as the head 
of household for the major portion of the year 
has the larger adjusted gross income, that spouse 
is entitled only to the two thousand two hundred 
dollars ($2,200) married person's exemption and 
if he or she by agreement with the deceased 
spouse's representative allows the deceased 
spouse to claim the two thousand two hundred 
dollars ($2,200) married person's exemption, 
then the surviving spouse is entitled to only a one 
thousand one hundred dollars ($1,100) personal 
exemption and is not entitled to the two thou- 
sand two hundred dollars ($2,200) head of 
household exemption. 

History Note: Statutory Authority G.S. 



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711 



FINAL RULES 



I05-I49(a)(2): I05-I49(a)(4); I05-I49(a)(7): 

1 05- 1 49 (a) (2a): 105-135; 105-262: 

Eff. February I, 1976: 

Amended Eff. November 1 , 1988: 

August I, 1986: May I, 1984: June 1, 1982. 

.0304 BLIND PERSONS 

(a) An individual who is totally blind or whose 
visual acuity does not exceed 20/200 in the better 
eye with correcting lenses, or whose widest di- 
ameter of visual field subtends an angle of no 
greater than 20 degrees, is entitled to claim one 
thousand one hundred dollars ($1,100) personal 
exemption in addition to any other allowable 
exemption. The extra one thousand one hun- 
dred dollars ($1,100) blind exemption appUes 
only to the taxpayer and not to the spouse or any 
dependent of the taxpayer. 

History Note: Statutory Authority G.S. 
105-i49(a)(8): 105-262: 
Eff. February I. 1976: 
Amended Eff. November 1, 19SS: 
February 21. 1979. 

.0305 INDI\ IDLALS AGE 65 OR OVER 

An individual who has reached the age of 65 
years on or before the last day of his taxable year 
is entitled to claim one thousand one hundred 
dollars ($1,100) personal exemption in addition 
to all other allowable exemptions. This addi- 
tional one thousand one hundred dollars ($1,100) 
personal exemption apphes only to the taxpayer 
and not to a spouse or any dependent of the 
taxpayer. 

History Note: Statutory Authority G.S. 
105- 149(a) (9): 105-262: 
Eff February I. 1976: 
Amended Eff November I. 1988. 

.0306 SEVERELY RETARDED DEPENDENT 

A parent or guardian who provides over half the 
support during the year for a person with an in- 
telhgence quotient (I.Q.) below 40 may claim an 
additional two thousand two hundred dollars 
($2,200) exemption. In order to qualify for this 
additional exemption there must be attached to 
the income tax return a statement signed by a li- 
censed physician, psychologist, or psychological 
examiner verifying that the dependent's intelli- 
gence quotient is below 40. 

History Note: Statutory Authority G.S. 
105- /49(a) (W): 105-262: 
Eff February I. 1976: 
Amended Eff November /, 1988: 
February 4, 1978. 



.0307 HEMOPHILIACS 

A taxpayer who is a hemophiliac wLU be allowed 
an additional one thousand one hundred dollars 
($1,100) exemption for himself and a taxpayer 
will be allowed an additional one thousand one 
hundred dollars ($1,100) exemption for each de- 
pendent who is a hemophiliac. Eligible 
hemophiliacs must submit a certificate from a 
physician or county health department to the di- 
vision of health services of the North Carolina 
Department of Human Resources certifying that 
their condition meets the criteria set out in G.S. 
105- 149(a) and must attach a supporting state- 
ment to the North Carolina income tax return 
verifying that such certificate has been obtained 
and submitted. This exemption may be claimed 
for a certified spouse who meets the requirements 
for a dependent even though a dependency ex- 
emption may not be claimed. 

Historv Note: Statutory Authority G.S. 
105-149(a)(8a): 105-262: 
Eff February 1, 1976: 
Amended Eff November 1, 1988: 
April 19, 1981. 

.0308 EXEMPTION FOR DEPENDENTS 

(a) In addition to the basic exemption of one 
thousand one hundred dollars ($1,100) or two 
thousand two hundred dollars ($2,200) an ex- 
emption of eight hundred doOars ($800.00) may 
be claimed for each qualified dependent. To 
claim an Lndi\ idual as a dependent the following 
three tests must be met: 

(1) Over one-half the support for the year must 
be furnished by the taxpayer. 

(2) The gross income of the individual claimed 
must be less than one thousand dollars 
($1,000) during the year (except a child 
or stepchild of the taxpayer who was a 
full-time student or under 19 years of age). 

(3) The individual must fall within one of the 
following classes: 

(A) related to the taxpayer as follows: son, 
daughter, stepchild, mother, father, 
grandparent, brother, sister, grandchild, 
stepbrother, stepsister, stepmother, 
stepfather, mother-in-law, father-in-law, 
brother-in-law, sister-in-law, son-in-law, 
daughter-in-law, and the following if re- 
lated by blood: aunt, uncle, nephew, 
niece; 

(B) a member of the same household who 
was related to the taxpayer by blood, af- 
finity or adoption, the taxpayer's foster 
child, or an individual of whom the tax- 
payer had legal custody during the taxable 
year; 



712 



NORTH CAROLINA REGISTER 



FINAL RULES 



(C) a former member of the same household 
as the taxpayer who otherwise qualifies as 
a dependent who for the taxable year re- 
ceives institutional care required by reason 
of a physical or mental disability. 

History Note: Statutory Authority G.S. 
I05-/49(aJ(5); 105-262; 
Eff. February I, 1976; 
Amended Eff. November I, 1988; 
Mav I, 1984; April 19, 1981; 
February 4, 1978. 

.0309 DEPENDENT IN INSTITUTION 
OF HIGHER LEARNING 

An exemption of six hundred sixty doUars 
($660.00) in addition to all other exemptions is 
allowed for a dependent who is a full-time stu- 
dent at an accredited college or university or 
other institution of higher learning. For this 
purpose, a full-time student means a dependent 
enroUed for full-time study on the last day of the 
income year or enrolled for full-time study for a 
period of at least five months (whether or not 
consecutive) during the income year. Depen- 
dents for this purpose are individuals listed in 17 
NCAC 6B .0308(a)(3). Attendance as a full-time 
student at one of the following institutions, for 
purposes other than to secure a high school di- 
ploma, will meet the requirements for claiming 
the additional six hundred sixty dollars ($660.00) 
exemption: 

(1) any accredited four-year or two-year college 
or university, 
a technical institute, 
a business college, 



(2) 
(3) 
(4) 
(5) 
(6) 



a beauty school, 
a barber college, 

a nurses school 
program). 
The additional six 



(including a nondegree 

hundred sixty dollars 
($660.00) exemption may not be claimed by a 
taxpayer for himself or herself. Neither a hus- 
band or wife may claim the additional six hun- 
dred sixty dollars ($660.00) by reason of the other 
spouse being cnroDed fuU-time in an institution 
of higher learning. 

History Note: Statutory Authority G.S. 
I05-I49(a}(5); 105-262; 
Eff February I. 1976; 
Amended Eff November 1 , 1988; 
April 19, 1981. 

.0310 DECEASED OR INCOMPETENT 
INDIVIDUALS 

A fiduciary filing a return for an individual who 
has died during the year may claim the same 
basic one thousand one hundred dollars ($1,100) 



or two thousand two hundred dollars ($2,200) 
personal exemption to which the taxpayer would 
have otherwise been entitled plus any applicable 
allowance for dependents. 

A fiduciary filing a return for an incompetent 
individual may claim the same exemption to 
which the individual would otherwise be entitled. 

History Note: Statutory Authority G.S. 
1 05- 1 49(a) (6); 105-262; 
Eff February f 1976; 
Amended Eff. November I, 1988. 



.0312 OTHER CONSIDERATIONS 

The status on the last day of the income year 
determines the right of the individual to the ex- 
emption with the foUowing exceptions: 

(1) An individual is entitled to the exemptions 
for a husband, wife or dependents who died 
during the year. 

(2) j\n individual who shall have been divorced 
or separated or who shall have ceased to be 
head of household during the income year 
may claim the same exemption to which he 
or she would have been entitled if the change 
had not occurred, provided the status re- 
mained unchanged for the major portion of 
the income year. 

Note: A married individual entitled to claim a 
two thousand two hundred dollars ($2,200) ex- 
emption who separated from his or her spouse 
after the major portion of the year had passed 
may for that year claim a two thousand two 
hundred dollars ($2,200) exemption although for 
the next year the exemption may be one thou- 
sand one hundred dollars ($1,100). In this case, 
the individual with the larger adjusted gross in- 
come for the taxable year will be entitled to two 
thousand two hundred dollars ($2,200). An in- 
dividual making such a claim must be able to 
submit factual information that his or her income 
was the larger. 

The last day of the income year for an in- 
dividual who has died is the date of death; 
therefore, the major portion of the income 
year for a deceased individual who was di- 
vorced or was a head of household is the 
major portion of the period from the first 
day of the income year to the date of death. 

(3) A ta.xpayer shall be entitled to claim an ex- 
emption for an indi\idual who qualified as 
a dependent during the year even though on 
the last day of the year the status was not 
such as to meet the dependency require- 
ments, provided that the support furnished 
constituted over half of his or her support 
for the year. 



NORTH CAROLINA REGISTER 



713 



FINAL RULES 



A child bom alive at any time during the 
year may be claimed as a dependent even 
though such child lived only a short time. 
A still-bom child cannot be claimed as a 
dependent. 

History Note: Statutory Authority G.S. 
105- 149(c): 105-262: 
Eff. February I. 1976: 
Amended Eff. November I, I9S8: 
May I. I9S4: March II, 1978. 

.0313 DEAF INDIVIDLALS 

An individual who has a loss of hearing in the 
speech frequencies (500 to 2000 Hertz) in the 
better ear that averages 86 decibels (I.S.O.) or 
more is entitled to claim an additional exemption 
of one thousand one hundred dollars ($1,100). 
The additional exemption applies only to the 
taxpayer and not to the spouse or a dependent. 
A supporting statement from a physician must 
be attached to the return. 

History Note: Statutory Authority G.S. 
105-149(a)(8b): 105-262: 
Eff February 11. 1978: 
Amended Eff November 1 , 1988. 

.0314 RENAL DISE.VSE 

A taxpayer who suffers from chronic irreversible 
renal disease and whose condition requires the 
use of dialysis is entitled to an additional one 
thousand one hundred dollars ($1,100) ex- 
emption and a taxpayer is entitled to an addi- 
tional one thousand one hundred dollars ($1,100) 
for each dependent with such disease. EUgible 
individuals must submit a certificate from a phy- 
sician or county health department to the Divi- 
sion of Health Ser\ices of the North Carohna 
Department of Human Resources certilVing that 
their condition meets the criteria set out in G.S. 
105- 149(a) and must attach a supporting state- 
ment to the return verifying that such certificate 
has been submitted. This exemption may be 
claimed for a qualified spouse who meets the re- 
quirements for a dependent even though a de- 
pendency exemption may not be claimed. 

History Note: Statutory Authority G.S. 
105-I49(a)(8c): 105-262: 
Eff February 11, 1978: 
Amended Eff. November 1 , 1988: 
April 19, 1981. 

.0315 PARAPLEGICS 

An additional one thousand one hundred dol- 
lars ($1,100) exemption may be claimed for the 
taxpayer or the taxpayer's dependent who is a 
paraplegic or who is disabled to the extent that 



he must use a wheelchair to move about and to 
function effectively or who is a double-leg 
amputee above the ankle. This exemption may 
be claimed for a qualified spouse who meets the 
requirements for a dependent even though a de- 
pendency exemption may not be claimed. A 
supporting statement from a physician must be 
attached to the return. 

History Note: Statutory Authority G.S. 
105-149(a)(8d): 105-262: 
Eff April 19, 1981: 
Amended Eff November 1, 1988; 
February 1, 1988. 

.0316 CYSTIC FIBROSIS 

An additional one thousand one hundred dol- 
lars ($1,100) exemption may be claimed for the 
taxpayer or the taxpayer's dependent who has 
cystic fibrosis. To qualify for the exemption, el- 
igible individuals must submit with their income 
tax return a certificate from the Division of 
Health Services of the North Carolina Depart- 
ment of Human Resources. This exemption 
may be claimed for a qualified spouse who meets 
the requirements for a dependent even though a 
dependency exemption may not be claimed. 

History Note: Statutory Authority G.S. 
105-149(aj (8eJ: 105-262: 
Eff August 1, 1986: 
Amended Eff. November 1 , 1988. 

.0317 SPINA BIFIDA 

An additional one thousand one hundred dol- 
lars ($1,100) exemption may be claimed for the 
taxpayer or the taxpayer's dependent who has 
spina bifida, an open neural tube defect. To 
qualify for the exemption, eligible individuals 
must submit with their income tax return a cer- 
tificate from the Division of Health Services of 
the North Carolina Department of Human Re- 
sources. This exemption may be claimed for 
qualified spouse who meets the requirements for 
a dependent even though a dependency ex- 
emption may not be claimed. 

History Note: Statutory Authority G.S. 
105- 149(a) (8f): 105-262: 
Eff August I, 1986: 
Amended Eff November 1, 1988. 

.0318 MLLTIPLE SCLEROSIS 

.\n additional one thousand one hundred dollar 
($1,100) exemption may be claimed for the tax- 
payer or the taxpayer's dependent who has mul- 
tiple sclerosis. To qualify for the exemption, 
eligible indi\iduals must submit with their in- 
come tax retum a supporting statement from a 



714 



NORTH CAROLINA REGISTER 



FINAL RULES 



physician or county health department. This 
exemption may be claimed for a qualified spouse 
who meets the requirements for a dependent even 
though a dependency exemption may not be 
claimed. 

History Note: Statutory Authority G.S. 
IOS-l49(a)(Sg); 105-262; 
Eff. August I, 1986; 
Amended Eff. November 1 , 1988. 

.0319 SEVERE HEAD INJLRY 

An additional one thousand one hundred dol- 
lars ($1,100) exemption may be claimed for the 
taxpayer's dependent who is in either (1) a 
vegetative state or (2) a severely disabled condi- 
tion as assessed by the Glasgow Outcome Scale. 
To qualify for the exemption, a supporting 
statement from a physician must be attached to 
the income tax return verifying that the depend- 
ent has one of these conditions. This exemption 
may be claimed for a qualified spouse who meets 
the requirements for a dependent even though a 
dependency exemption may not be claimed. 

History Note: Statutory Authority G.S. 
I05-I49(a)(8h); 105-262; 
Eff August I, 1986; 
Amended Eff November I, 1988. 

.0320 MLSCLLAR DYSTROPHY 

An additional one thousand one hundred dol- 
lars ($1,100) exemption may be claimed for the 
taxpayer or the taxpayer's dependent who has 
multiple sclerosis. To qualify for the exemption, 
ehgibie individuals must submit with their in- 
come tax return a supporting statement from the 
physician or county health department. This 
exemption may be claimed for a qualified spouse 
who meets the requirements for a dependent even 
though a dependency exemption may not be 
claimed. 

History Note: Statutory Authority G.S. 
105-149(a); 105-262; 
Eff November I, 1988. 

.0321 ORGAN AND TISSUE TRANSPLANTS 

An additional one thousand one hundred dol- 
lars ($1,100) exemption may be claimed for the 
taxpayer or the taxpayer's dependent who is re- 
quired to take immunosuppressant drugs for the 
remainder of their lives because of an organ or 
tissue transplant. To qualify for the exemption, 
a supporting statement from a physician or 
county health department must be attached to 
the income tax return certifying that the taxpayer 
or his dependent is the recipient of an organ or 
tissue transplant and is required to take 



immunosuppressant drugs for the remainder of 
his life to suppress rejection of a transplanted 
organ or tissue. This exemption may be claimed 
for a qualified spouse who meets the require- 
ments for a dependent even though a dependency 
exemption may not be claimed. 

History Note: Statutory Authority G.S. 
105-149(a); 105-262; 
Eff November 1, 1988. 

SECTION .0400 - ANNUITIES AND PENSIONS 

.0408 FEDERAL EMPLOYEES PENSIONS 

(a) For taxable years beginning on or after 
January 1, 1989, in the case of a pension received 
under a federal employee retirement program to 
which an employee made contributions during 
his working years, the recipient of the pension 
payments is allowed to exclude four thousand 
dollars ($4,000) each year. If the employee will 
recover his cost within three years, he is allowed 
to recover his cost tax free and after recovery of 
cost, four thousand dollars ($4,000) of the 
amount received each year is exempt. If the 
employee will not recover his cost within three 
years, he is allowed to exclude an amount as cost 
recovery each year under the general rule stated 
at 17 NCAC 6B .0402 and also four thousand 
dollars ($4,000) of the excess over the cost re- 
covery portion received each year. The four 
thousand dollar ($4,000) exclusion applies to aO 
benefit payments, both disability and regular, af- 
ter the taxpayer has recovered his cost. State law 
does not exclude a portion of the payment be- 
cause of permanent and total disability. 

When there is an increase in the amount of the 
benefits paid on a federal employee's pension, the 
amount previously determined as the annual ex- 
clusion is not changed. The increased benefit 
increases the reportable income each year from 
the pension. 

(b) Each beneficiary receiving a portion of a 
deceased federal employee's pension is allowed 
to exclude up to four thousand dollars ($4,000) 
of the amount received from the pension each 
year. 

A retired serviceman may exclude four thousand 
dollars ($4,000) each year of the retired or 
retainer pay received as a result of service in any 
of the armed forces of the United States. Since 
armed forces retirement pay is not payable to a 
survivor or beneficiar>' there is no application of 
the four thousand dollar ($4,000) exclusion to 
them. 

(c) All amounts received under a retired 
serviceman's family protection plan may be ex- 
cluded from gross income until the amount ex- 
cluded equals any amount of the consideration 



NORTH CAROLINA REGISTER 



715 



FINAL RULES 



for the contract which the retired serviceman has 
not previously recovered by exclusion from state 
income taxation under G.S. 105-141(b)(20). 

In addition there may be excluded any amount 
treated as additional consideration paid by the 
employee under G.S. 105-141(b)(l 1). 

(d) The consideration for the contract which 
may be excluded under G.S. 105-141(b)(20j by 
the retired serviceman, or under G.S. 105-141. l(i) 
by the beneficiaPv' or beneficiaries, is the total of 
the reduction in the retired or retainer pay of the 
retired ser\iccman used to provide the annuity 
plus an\' amounts deposited by the ser\'iceman 
with the U.S. Treasury pursuant to the annuity 
or to his election to receive veterans benefits in 
lieu of some or all of his retirement pay. 

(e) If an indi\idual receives separate retirement 
payments as a retired federal employee and as a 
retired ser\'iceman he is entitled to separate ex- 
clusions up to four thousand dollars ($4,000) 
each. 

WTien an individual who is receiving payments 
subject to a four thousand doUar ($4,000) exclu- 
sion moves into or out of North Carolina during 
the year, the exclusion for that year must be 
prorated according to the number of reportable 
monthly payments for the year which are re- 
portable to North Carolina. A retired federal 
civil service worker who moves into North 
Carolina during a year when he is recovering his 
cost under the three year rule makes the pro- 
ration on the basis of the number of months in 
which payments are received after he has recov- 
ered his costs. (See also Exempt Income.) 

History Sole: Statutory Authority G.S. 
105-141.1; 105-141(b)(14); 
105-141(b)(18): 105-141 {b)(20); 105-262; 
Eff. February 1, 1976; 
Amended Eff. November I, 19SS; 
June 1, 19,82; .March 22, 1981; 
February 11, 1978. 

SECTION .0600 - OLT-OF-ST.\TE INCOME 
AND TAX CREDITS 

.0602 RESIDENTS 

(a) G.S. 105-135(13) defmes residents for any 
income year as "individuals who, at any time 
during such income year, are domiciled in this 
state, or who, whether regarding their domicile 
as in tliis state or not, reside within this state for 
other than a temporary or transitory purpose." 
Domicile has been defined as the place where an 
individual has a true, fixed, permanent home and 
principal establishment, and to which place, 
whene\'er he is absent, he has the intention of 
returning. There are other definitions of 



domicile, and this definition is presented solely 
for use as a guide in determining residency. 

In many cases, a determination must be made 
as to when or whether a domicile has been 
abandoned. A long standing principle in tax ad- 
ministration, repeatedly upheld by the courts, is 
that a man can have but one domicile; and, once 
established, it is not legally abandoned until a 
new one is established. A taxpayer may have 
several places of abode in a year, but at no time 
can an individual have more than one domicile. 
A mere intent or desire to make a change in 
domicile is not enough; voluntary and positive 
action must be taken. 

(h) In the United States the taxable situs of 
intangible property, such as bank deposits, 
stocks, bonds, etc., is usually considered to be the 
residence of the owner if the owner is an indi- 
\idual. Intangible property used in a trade or 
business would acquire a taxable situs at the lo- 
cation of the business. The physical location of 
the bank, the corporation, the stock certificates, 
etc., does not determine taxing jurisdiction over 
the intangible property or income derived there- 
from. North Carolina taxes a resident on income 
he derives from any intangible property which 
he owns and does not allow credit for tax paid 
to another state thereon. 

Some foreign countries, however, tax any in- 
come or property over which they exercise con- 
trol. In some cases they may levy and collect an 
income tax on dividends, interest, etc., when 
these items are paid. A North Carolina resident 
who receives dividends or similar payments from 
sources within foreign countries from which in- 
come tax has been withheld may be entitled to a 
tax credit. 

History Note: Statutory .iuthoritv G.S. 
105-135(13); 105-141(a); 105-147(9); 
105- 149(b); 105-151; 105-262; 
Eff. February 1, 1976; 
Amended Eff November 1, 1988; 
August 1, 1986; May 1, 1984; 
June 1, 1982. 

.0603 NONRESIDENTS 

(b) A nonresident individual is required to re- 
port to North Carolina all income which is at- 
tributable to the ovs'nership of any interest in real 
or tangible personal property in this state or 
which is from a business, trade or profession, or 
occupation carried on in this state. No tax credit 
is allowed by North Carolina to a nonresident for 
tax paid to another state or country. For indi- 
vidual income tax purposes, the term "business 
carried on in this state" means the operation of 
any activity within North Carolina regularly, 
continuously, and systematically for the purpose 



716 



NORTH CAROLINA REGISTER 



FINAL RULES 



of income or profit. A sporadic activity, a 
hobby, or an amusement diversion does not 
come within the defmition of a business carried 
on in this state. Income from an intangible 
source which is received in the course of a busi- 
ness operation in this state so as to have a taxable 
situs here (including such income which is in- 
cluded in the distributive share of partnership in- 
come, whether distributed or not) is taxable to 
nonresidents. 

A nonresident may claim a deduction on his 
North Carolina income tax return for business 
expenses paid in connection with the earning of 
income in North Carolina. Also, a nonresident 
may claim itemized nonbusiness deductions or 
the standard deduction on the basis that his 
North Carolina adjusted gross income relates to 
his total adjusted gross income, provided the 
nonresident's state of residence allows similar 
apportionment to North Carolina residents. 
Residents of states not having an income tax will 
be allowed itemized nonbusiness deductions on 
their North Carolina income tax return. From 
information available, residents of the other 49 
states and the District of Columbia would be al- 
lowed apportioned nonbusiness deductions or 
the standard deduction when filing a North 
Carolina tax return. 

G.S. 105-142(c) provides that if an established 
business in North Carolina is owned by a non- 
resident individual or by a partnership having one 
or more nonresident members and if the business 
is operating in one or more other states, the net 
income of the business attributable to North 
Carolina for the purpose of computing the North 
Carolina income tax liability of the nonresident 
individual or nonresident partner must be deter- 
mined by multiplying the total net income of the 
business by the allocation ratio ascertained under 
the provisions of G.S. 105-130.4. (I'his allo- 
cation of income does not effect the reporting of 
income by the resident individual or resident 
partner because he is taxable on his share of the 
net income of the business whether or not any 
portion of it is attributable to another state or 
country.) 

History Note: Statutory Authority G.S. 
105-130.4; 105-134; 105-135(13); 
105-I42(c); 105-147(18); 105-151; 
105-262; 

Eff. Febr-uary I, 1976; 
Amended Eff. November I, 198S; 
August I. 1986; May 1, 1984; 
June 1, 1982. 

SECTION .1700 - EXEMPT INCOME 
.1750 FOSIER PARENTS REIMBURSEMENT 



Payments to a foster parent by a child-placing 
agency are not taxable income provided the pay- 
ments received do not exceed the expenses in- 
curred for taking care of the child in your home. 

If the individual's expenses exceed the pay- 
ments, a deduction for a charitable contribution 
may be claimed for the excess expenses, provided 
the participating organization on behalf of which 
the expenses are incurred is a qualified organiza- 
tion to which contributions are otherwise 
deductible for income tax purposes. 

History Note: Statutory Authority G.S. 
105-141 (a); 105-262; 
Eff August 1, 1986; 
Amended Eff November 1, 1988. 

SECTION .2700 - INTEREST DEDUCTION 

.2704 HUSBAND AND WIFE 

When nonbusiness property is jointly owned by 
husband and wife or is owned by them as a 
tenancy by the entirety the spouse actually pay- 
ing the interest may claim the deduction. 

History Note: Statutory Authority G.S. 
105-/47(5); 105-262; 
Eff February I, 1976; 
Amended Eff November 1, 1988. 

SECTION .2800 - TAXES PAID 

.2803 WHO MAY CLAIM THE DEDUCTION 

A taxpayer may deduct only those taxes im- 
posed upon him or her. 

Note: Real estate taxes are deductible only 
by the owner of the property. When non- 
business property is jointly owned by hus- 
band and wife or is owned by them as a 
tenancy by the entirety, taxes attributable to 
the property are deductible by the spouse 
actually paying the taxes. 
Tenant-shareholders in a cooperative housing, 
condominium, or apartment corporation may 
deduct amounts paid to the corporation repres- 
enting their proportionate share of the real estate 
taxes the corporation paid or incurred on the 
property. If the corporation leases the land and 
buildings and is required to pay the real estate 
taxes under the terms of the lease agreement, the 
shareholder's portion of such taxes is not 
deductible. 

History Note: Statutory Authority G.S. 
105-147(6); 105-262; 
Eff February 1, 1976; 
Amended Ejf. November 1, 1988. 

SECTION .3000 - CONTRIBUTIONS 



NORTH CAROLINA REGISTER 



717 



FINAL RULES 



.3007 NONDEDUCTIBLE CONTRIBUTIONS 

Some contributions which are not deductible 
axe as follows: 

(1) gifts to relatives, friends, or other individ- 
uals; 

(2) donations to propaganda organizations; 

(3) contributions to civic leagues and social 
clubs; 

(4) contributions to labor unions; 

(5) contributions to chambers of commerce; 

(6) payments to a hospital for the care of a 
particular patient; 

(7) payment of tuition earmarked for a specific 
individual or for specific individuals; 

(8) blood donated to the Red Cross or other 
blood banks; 

(9) the value of the use of property by a char- 
itable organization; 

(10) dues to Y.M.C.A. or other organizations 
for which personal benefits are received; 

(11) contributions (an estimated amount) 
based on a certain percentage of income; 

(12) that portion of the fair market value of 
property allowed as a tax credit for contrib- 
uting property for certain public purposes 
(See Tax Credits); 

(13) contributions to the United States Gov- 
ernment or any other state or its 
instrumentalities or its political subdivisions 
are not deductible. 

History Note: Statutory Authority G.S. 
105-147(15); 105-147(16); 105-262; 
Eff. February I, 1976; 
Amended Eff. November 1, 1988; 
April 5, 1 981. 

SECTION .3500 - PARTNERSHIPS 

.3525 TEN.4NCY BY THE ENTIRETY 

(b) For taxable years beginning on and after 
January 1, 1983, there cannot be a valid partner- 
ship in respect to the income or loss from prop- 
erty owned as tenants by the entirety unless the 
property is actually transferred to a partnership 
so that it is no longer owned as tenants by the 
entirety. The law specifically provides how the 
income or loss from property owned as tenants 
by the entirety shall be reported for State Income 
Tax purposes. (See Tenancy By the Entirety.) 
If there is a valid partnership agreement and the 
property is transferred so that it is no longer 
owned as entireties' property but is owned by a 
partnership, the partnership income must be re- 
ported as pro\ided by the partnership agreement 
and a partnership return would be required to be 
filed. 

History Note: Statutoiy Authority G.S. 



1 05- 142(c); 105- 1 52(a) (3); 105- 154(b); 

105-262; 

Eff. February I, 1976; 

Amended Eff November I, 1988; 

May 1, 1984. 

SECTION .3800 - MISCELLANEOUS RULES 

.3802 DEDUCTIONS 

(g) When a taxpayer uses a portion of his home 
regularly and exclusively either as his principal 
place of business; or as a place of business that 
is used by patients, clients, or customers in 
meeting and dealing with him in the normal 
course of his trade or business, he may deduct a 
pro rata portion of the operating and depreci- 
ation expense. In determining whether or not 
the expenses are allowable deductions, the de- 
partment follows those federal rules and regu- 
lations in effect during the income year, except 
that North Carolina has no provision for reduc- 
ing such expenses by two percent of adjusted 
gross income as required for federal tax purposes, 
or for Limiting the home office expense deduction 
to the amount of gross income from the business. 
For state tax purposes, the entire home office 
expense is deductible in the year of payment 
without any carryover as allowed for federal tax 
purposes. 

History Note: Statutory Authority G.S. 
105-147(1);I05-147(2); 
105-147(7); 105-I47(9)a;105-I47( 10); 
105-147(24); 105-147(28); 105-148(1); 
105-148(2); 105-/48(8); 105-262; 
Eff Februan' 1, 1976; 
Amended Eff November 1, 1988; 
February 1, 1988; April I, 1987; 
February 1, 1987. 

.3803 OTHER ITEMS 

(1) When an individual checks "Yes" to the 
question, "Do you want $1.00 to go to this fund 
(North Carolina Pohtical Parties Financing 
Fund):" on his tax return, the total funds desig- 
nated will be distributed to political parties in 
North Carolina on a pro rata basis according to 
voter registrations. Checking "Yes" will neither 
increase his tax nor reduce his refund. 

(r) Effective for income tax years beginning on 
or after January' 1, 1988, an mdividual may elect 
to contribute all or any portion of his income tax 
refund, at least one doOar ($1.00) or more, to the 
North Carolina Candidates Financing Fund. 
Once the election is made to contribute, the 
election cannot be revoked after the return has 
been filed. 

The amount contributed may be claimed as a 
contribution on the following years income tax 



718 



NORTH CAROLINA REGISTER 



FINAL RULES 



return provided the individual itemizes his non- 
business deductions. 

The contributions will be used in the political 
campaigns of certified candidates for the North 
Carolina Council of State. 

History Note: Statutory Authority G.S. 
8-45.3: I05-I42(a): I05-I44(a); 
105-144.3; I05-I47(l)h; I05-I47(9)a; 
105-147(17); 105-147(19); 105-148(1); 
105-159. 1; 105-163. 16(c); 105-163. 16(e); 
105-251; 105-262; 147-77; 
Eff. February I, 1976; 
Amended Eff. November 1 , 1988; 
February I, 1988; February I. 1987; 
August I, 1986. 

SUBCHAPTER 6C - WITHHOLDING 

SECTION .0100 - WITHHOLDING INCOME 
TAXES 

.0110 COMMON CARRIERS 

Under the provisions of Federal Public L^w 
91-569, withholding of state income tax from 
wages of employees who cross state lines in the 
operation of interstate commerce common carri- 
ers or on private motor vehicle carriers of prop- 
erty or as roadway maintenance employees of 
railroads is restricted to only one state, usually 
the state of residence of the employees; however, 
if the employee earns more than 50 percent of 
his wages in a nonresident state, tax may only be 
withheld for the nonresident state. The 50 per- 
cent factor is determined by mileage in the case 
of railroad and motor vehicle operating persormel 
and by time worked or scheduled flight time for 
employees of other common carriers. With- 
holding for the nonresident state will apply only 
if the employer's payroll records for the preceding 
year show that the employee earned more than 
50 percent of his total compensation in the non- 
resident state. 

Under the Federal Aviation Act (49 
USCS-1512), a nonresident airline employee 
rendering services on an aircraft would not be li- 
able for North Carolina income tax unless his 
scheduled flight time in North Carolina is more 
than 50 percent of his total scheduled flight time 
during the calendar year. If the employee's flight 
logs show that more than 50 percent of the 
scheduled flight time is in North Carolina, the 
amount of income reportable to this state would 
be based on the percentage that his North 
Carolina flight time is to his total flight time for 
the year. 

Hi.Uory Note: Statutory Authority G.S. 
105-163.2; 105-163.18; 105-262; 
49 U.S.C. Sec. 26; 49 U.S.C. Sec. 30/ A; 



49 U.S.C. Sec. 923; 
49 U.S.C. Sec. 1512; 
Eff February 1, 1976; 
Amended Eff November I, 



1988. 



TITLE 19A - DEPARTMENT OF STATE 
TRANSPORTATION 

CHAPTER 2 - DIVISION OF HIGHWAYS 

SUBCHAPTER 2E - MISCELLANEOUS 
OPERATIONS 

SECTION .0200 - OUTDOOR ADVERTISING 

.0203 OUTDOOR ADVERTISING ON 

INTERSTATE AND FEDERAL AID 
HWYS. 

The following standards shall apply to the 
erection and maintenance of outdoor advertising 
signs in all zoned and unzoned commercial and 
industrial areas located within 660 feet of the 
nearest edge of the right of way of interstate and 
tederal-aid primary highways. The standards 
shall not apply to those signs enumerated in G.S. 
136- 129(1), (2), and (3), which are directional and 
other official signs and notices, signs advertising 
the sale or lease of property upon which they are 
located, and signs which advertise activities con- 
ducted on the property upon which they are lo- 
cated: 

(1) Size of Signs: 

(a) The maximum area for any one sign shall 
be 1,200 square feet with a maximum 
height of 30 feet and maximum length of 
60 feet, inclusive of any border and trim 
but excluding the base or apron, supports, 
and other structural members. 

(b) The area shall be measured by the smallest 
square rectangle, triangle, circle, or com- 
bination thereof which will encompass the 
entire sign. 

(c) The maximum size limitations shall apply 
to each side of a sign structure; the signs 
may be placed back-to-back, side-by-side, 
or in V-type construction with not more 
than two displays to each facing, and such 
sign structure shall be considered as one 
sign. 

(d) Side-by-side signs shall be structurally tied 
together to be considered as one sign 
structure. 

(e) V-type and back-to-back signs will not be 
considered as one sign if located more 
than 15 feet apart at their nearest points. 

(2) Spacing of Signs: 

(a) Interstate and Federal-aid Primary High- 
ways. Signs may not be located in such 
a manner as to obscure, or otherwise 
physically interfere with the effectiveness 



NORTH CAROLINA REGISTER 



719 



FINAL RULES 



of any official traffic sign, signal, or device, 
obstruct or physically interfere with the 
driver's view of approaching, merging, or 
intersecting traffic. 

(b) Interstate highways and freeways on the 
federal-aid primary system: 

(i) No two structures shall be spaced less 
than 500 feet apart. 

(ii) Outside of incorporated towns and 
cities, no structure may be located within 
500 feet of an interchange, collector dis- 
tributor, intersection at grade, safety rest 
area or informaticm center. The 500 feet 
shall be measured from the point at which 
the pavement widens and the direction of 
measurement shall be along the edge of 
pavement away from the interchange, 
collector distributor, intersection at grade, 
safety rest area or information center, as 
shown in Exhibit lA. In those inter- 
changes where a quadrant does not have 
a ramp, the 500 feet for the quadrant 
without a ramp shall be measured along 
the outside edge of pavement for the 
interstate or freeway highway as follows: 

(A) Where a route is bridged over the 
freeway or interstate highway, the 500 
foot measurement shall begin on the 
outside edge of pavement of the freeway 
highway or interstate at a point directly 
below the edge of the bridge. The di- 
rection of measurement shall be along 
the edge of pavement away from the 
interchange, as shown in Exhibit IB. 

(B) Where a freeway or interstate high- 
way is bridged over another route, the 
500 foot measurement shall be made 
from the end of the bndge in the quad- 
rant. The direction of measurement 
shall be along the edge of pa\ement 
away from the bridge, as shown in Ex- 
hibit IC. 

(C) Where the routes involved are both 
freeway or interstate routes, measure- 
ments on both routes will be made ac- 
cording to (1) and or (2), whichever 
applies. 

Should there be a situation where there is 
more than one point at which the pave- 
ment widens along each road within a 
quadrant, the measurement shall be made 
from the pavement widening which is 
furthest from the intersecting roadways. 

(c) Non-frccway federal-aid primar>' high- 
ways: 

(i) Outside of incorporated towns and cities 
-- no two structures shall be spaced less 
than 300 feet apart. 



(ii) Within incorporated towns and cities — 
no two structures shall be spaced less than 
100 feet apart. 

(d) The foregoing provisions for the spacing 
of signs do not apply to structures sepa- 
rated by buildings or other obstructions in 
such a manner that only one sign facing 
located within the above spacing distances 
is visible from the highway at any one 
time. 

(e) Official and "on-premise" signs, as per- 
mitted under the provisions of G.S. 
136-129(1) to (3), and structures that are 
not lawfully maintained shall not be 
counted nor shall measurements be made 
from them for purposes of determining 
compliance with spacing requirements. 

(f) The minimum distance between structures 

shall be measured along the nearest edge 
of the pavement between points directly 
opposite the signs along each side of the 
highway and shall apply only to structures 
located on the same side of the highways. 
(3) Lighting of Signs: Restrictions: 

(a) Signs which contain, include, or are illu- 
minated by any Hashing, intermittent, or 
moving light or lights are prohibited, ex- 
cept those giving public service informa- 
tion such as time, date, temperature, 
weather, or similar information. 

(b) Signs which are not etTecti\ely shielded as 
to prevent beams or rays of light from 
being directed at any portion of the trav- 
eled ways of the interstate or federal-aid 
primary" highway and which are of such 
intensity or briUiance as to cause glare or 
to impair the vision of the driver of any 
motor vehicle, or which otherwise inter- 
fere with any driver's operation of a motor 
vehicle are prohibited. 

(c) No sign shall be so iUuminated that it in- 
terferes with the effectiveness of, or ob- 
scures an official traffic sign, device, or 
signal. 

(d) All such lighting shall be subject to any 

other provisions relating to ligliting of 
signs presently applicable to all highways 
under the jurisdiction of the state. 

(e) Illumination shall not be added to non- 
conforming signs or signs confonning by 
virtue of the grandfather clause. 

History Note: Statutory Authority G.S. 
136-130; 

Eff. July 1. 1978: 
.Amended Eff. .Xovember I, I98S. 

CHAPTER 3 - DIVISION OF MOTOR 
VEHICLES 



720 



NORTH CAROLINA REGISTER 



FINAL RULES 



SUBCHAPTER 3D - LICENSE AND THEFT 
SECTION 

SECTION .0500 - GENERAL INFORMATION 

REGARDING SAFETY INSPECTION OF 

MOTOR VEHICLE 

.0515 SAFETY INSPECTION 

LICENSING AND PROCEDURES 

(a) The Attorney General of North Carolina 
has determined that publication of the complete 
regulations governing licensing as a North 
Carolina Safety Equipment Inspection Station, 
and the requirements and procedures for such 
inspections are impracticable, and that the sub- 
stance of this Rule should be summarized in ac- 
cordance with the provisions of G.S. 150A-63(c). 

(b) The regulations and procedures governing 
the licensing of Safety Equipment Inspection 
Stations for all counties arc contained in a man- 
ual entitled "Safety Equipment Emission In- 
spections, Windshield Certificate Replacement 
Regulations Manual." This manual includes all 
procedures and forms to be used in the process 
of the safety inspection required by law. 

(c) Official copies of these manuals are avail- 
able upon request from the Enforcement Section, 
Division of Motor Vehicles, Department of 
Transportation, 1100 New Bern Avenue, 
Raleigh, N. C. 27697. 

History Note: Statutory Authority G.S. 
20-1; 20-1 17.1(a): 20-122; 20-122.1; 20-123.1; 20- 
20-125.1; 20-126; 20-/27; 20-128; 20- 1 28.1; 
20-/29; 20-/29./; 20-/30; 20-/30./; 20-/30.2; 
20-/30.3; 20-/3/ through 20-/34; 20-/83.2; 
20-/83.3; 20-/83.4; 20-/83.5; 20-/83.6; 
20-/83.7; 20-/83.8; /50A-63(c); 
Eff. Januarv /, /983; 
Amended Eff. November /, /988. 

SECTION .0800 - SAFETY RULES AND 
REGULATIONS 

.0801 SAFETY OF OPERATION AND 
EQUIPMENT 

(a) The rules and regulations adopted by the 
U.S. Department of Transportation relating to 
safety of operation and equipment (49 CFR 
Parts 390-398 - formerly Parts 290-298 - and 
amendments thereto) shall apply to all for-hire 
motor carrier vehicles engaged in interstate com- 
merce and intrastate commerce over the high- 
ways of the State of North Carolina, whether 
common carriers, contract carriers or exempt 
carriers. 

(b) The rules and regulations adopted by the 
U.S. Department of Transportation relating to 
safety of operation and equipment (49 CFR 
Parts 390-398 and amendments thereto) shall 



also apply to all private motor carriers engaged 
in the transportation of hazardous waste and ra- 
dioactive waste in interstate and intrastate com- 
merce over the highways of the State of North 
Carolina, 
(c) The rules and regulations adopted by the 
U.S. Department of Transportation relating to 
safety of operation and equipment (49 CFR 
Parts 390-398 and amendments thereto) shall 
apply to all private motor carrier vehicles on the 
highways of the State of North Carolina used in 
commerce to transport passengers or cargo: 

(1) if such vehicle has a gross vehicle weight 
rating of 10,000 pounds or more; or 

(2) if such vehicle is used in the transportation 
of materials f(nind to be hazardous in ac- 
cordance with the Hazardous Materials 
Transportation y\ct as amended in Title 
49, Code of Federal Regulations. 

49 CFR Part 395 Mb) shaU not apply to any 
private motor carrier engaged in a seasonal en- 
terprise whenever any current seven or eight 
consecutive days, as defined by Part 395.2 (c) and 
(d), has been preceded by any 24-hour off-duty 
period as defmed by Part 395.2(e) and the driver 
is on duty within a radius of 100 air miles of the 
point at which he reports for duty; and provided 
the driver has not been on duty more than 70 
hours in any seven consecutive days or more 
than 80 hours in any eight consecutive days. 49 
CFR Part 391.11 (b) (1), (b) (2), and (b) (6) shall 
not apply to drivers employed by private motor 
/2dir^ri^^o hold a valid North Carolina Driver's 
License as of June 1, 1988, or until such time that 
Part 383 (The Commercial Motor Vehicle Safety 
Act of 1986) shall be adopted by North Carolina. 

49 CFR Part 395.3(b) shall not apply to any 
intrastate motor carrier engaged in a seasonal 
enterprise whenever any current seven or eight 
consecutive days, as defined by Part 395.2(c) and 
(d) has been preceded by any 24-hour off-duty 
period as defined by Part 395.2(e) and the driver 
is on duty within a radius of 100 air miles of the 
point at which he reports for duty; and provided 
the driver has not been on duty more than 70 
hours in any seven consecutive days or more 
than 80 hours in any eight consecutive days. 49 
CFR Part 391.11(b)(1), (b)(2), and (b)(6) shall 
not apply to drivers employed by intrastate mo- 
tor carriers who hold a valid North Carolina 
Driver's License as of June 1, 1988, or until such 
time that Part 383 (The Commercial Motor Ve- 
hicle Safety Act of 1986) shall be adopted by 
North Carolina. 

History Note: Statutory Authority G.S. 20-384; 
Eff. December /, /9S3; 

Amended Eff November /, /988; July /, 1988; 
June /, /988. 



NORTH CAROLINA REGISTER 



721 



FINAL RULES 



SECTION .0900 - APPROVAL OF SLN 
SCRKEMNG DEVICES 

.0904 APPROVAL, AND LABELING OF 
DEMCES 

(a) No devices manufactured with a luminous 
reflectance of more than 20 percent or a light 
transmittance of less than 50 percent will be ap- 
proved for use on vehicles registered in this State. 

(b) After approval of the device by the com- 
missioner, each manufacturer shall pro\ide an 
appro\ed label with a means for permanent and 
legible installation between the device and each 
glazing surface to which it is applied. Each label 
shall contain the following information: 



(1) 

(2) 

(3) 
(c) 



The name and address of the manufac- 
turer; 

The registration number assigned to the 
device by the division; and 
The words, "complies with G.S. 20-127". 
Each manufacturer shall include in- 
structions with the device for proper installation, 
including the affixing of the label specified in 
Paragraph (b). The label shall be placed as re- 
quired by G.S. 20- 127(d). 

History Note: Statutory Authority G.S. 20-39; 
20-127; 

Eff. Januan' I. 1988; 
Amended Eff. November 1, 1988. 



722 



NORTH CAROLINA REGISTER 



NCACINDEX 



TITLE/MAJOR DIVISIONS OF THE NORTH CAROLINA ADMINISTRATFV E CODE 
TITLE DEPARTMENT 



1 
2 
3 
4 
5 
6 

■7 

8 

9 
10 
11 
12 
13 
14A 
15 
16 
17 
18 
19A 
20 
*21 
22 
23 
24 
25 
26 



Administration, Department of 

Agriculture, Department of 

Auditor, Department of State 

Commerce, Department of 

Corrections, Department of 

Council of State 

Cultural Resources, Department of 

Elections, State Board of 

Governor, Office of the 

Human Resources, Department of 

Insurance, Department of 

Justice, Department of 

l^bor. Department of 

Crime Control and Public Safety, Department of 

Natural Resources and Community Development, Department of 

Hducation, Department of 

Revenue, Department of 

Secretary of State, Department of 

Transportation, Department of 

Treasurer, Department of State 

Occupational Licensing Boards 

Administrative Procedures 

Community Colleges, Department of 

Housing I'inance Agency 

State Personnel, Office of 

Administrative Hearings, Office of 



NOTE: Title 2 1 contains the chapters of the various occupational licensing boards. 
CHAPTER LICENSING BOARDS 



2 
4 
6 

8 
10 
12 
14 
16 
18 
20 
21 
22 
26 
28 
31 
32 
33 
34 
36 
37 
38 
40 
42 



Architecture, Board of 

Auctioneers, Commission for 

Barber Examiners, Board of 

Certified Public Accountant Examiners, Board of 

Chiropractic Examiners, Board of 

Contractors, Licensing Board for 

Cosmetic Art Examiners, Board of 

Dental Examiners, Board of 

Electrical Contractors, Board of Examiners of 

Eorcsters, Board of Registration for 

Geologists, Board of 

Hearing Aid Dealers and Litters Board 

Landscape /Vrchitects, Licensing Board of 

Landscape Contractors, Registration Board of 

Martial & Eamily Therapy Certification Board 

Medical Examiners, Board of 

Midwifery Joint Committee 

Mortuary Science, Board of 

Nursing, Board of 

Nursing Home Administrators, Board of 

Occupational Therapists, Board of 

Opticians, Board of 

Optometry, Board of Examiners in 



NORTH CAROLINA REGISTER 



723 



NC AC INDEX 



44 Osteopathic Examination and Registration, Board of 

46 Pharmacy, Board of 

48 Physical Therapy, Examining Committee of 

50 Plumbing and Heating Contractors, Board of 

52 Podiatry Exammers, Board of 

53 Practicing Counselors, Board of 

54 Practicing Psychologists, Board of 

56 Professional Engineers and l.and Surveyors, Board of 

58 Real Estate Commission 

60 Refrigeration Examiners, Board of 

62 Sanitarian Examiners, Board of 

63 Social Work, Certification Board for 

64 Speech and Language Pathologists and 

Audiologists, Board of Examiners of 

66 Veterinary Medical Board 



U4 i\'OR TH CAROLINA REGIS TER 



CUMULA TIVE INDEX 



CUMULA TIVE INDEX 

(April 1988 - March 1989) 





1988 - 


1989 




Pages 




Issue 


1 - 


25 


1 


- April 


26 - 


108 


2 


- April 


109 - 


118 


3 


- May 


119 - 


145 


4 


- May 


146 - 


184 


5 


- June 


185 - 


266 


6 


- June 


267 - 


294 


7 


- July 


295 - 


347 


8 


- July 


348 - 


400 


9 


- August 


401 - 


507 


10 


- August 


508 - 


523 


11 


- September 


524 - 


593 


12 


- September 


594 - 


606 


13 


- October 


607 - 


686 


14 


- October 


687 - 


728 


15 


- November 



AO - Administrative Order 

AG - Attorney General's Opinions 

C - Correction 

E - Errata 

EO - Executive Order 

FDL - Final Decision Letters 

FR - Final Rule 

GS - General Statute 

JO - Judicial Orders or Decision 

ERA - List of Rules Affected 

M - Miscellaneous 

NP - Notice of Petitions 

PR - Proposed Rule 

SO - Statements of Organization 

TR - Temporary Rule 



ADMINISTRATION 

Administrative Analysis Division, 447 PR 

Auxiliary Services, 270 PR 

Departmental Rules, 270 PR 

Human Relations Council, 609 PR 

State Construction, 187 PR 

Youth Advocacy and Involvement Office, 148 PR 

ADMINISTRATrV E HEARINGS 

General, 579 PR 

Hearings Division, 76 PR, 581 PR 

Rules Division, 580 PR 



NORTH CAROLINA REGISTER 



725 



CUMULA THE INDEX 



ADMINISTRATIVE ORDKR 

Administrative Order, 369 AO 

AGRICULTURE 

Food and Drug Protection Division, 271 PR 

N.C. Gasoline and Oil Inspection Board, 689 PR 

N.C. Pesticide Board, 524 PR 

N.C. State Fair, 451 PR 

Plant Industr) , 453 PR 

Standards Division, 452 PR 

Structural Pest Control Committee, 296 PR 

COMMERCE 

.'Mcoholic Beverage Control Commission, 276 PR 

Departmental Rules, 612 PR 

Milk Comrmssion, 120 PR, 190 PR 

Se;ifood Industnal Park Authority, 613 PR 

COMMUMIV COLLEGES 

Community Colleges, 287 PR, 557 PR 

CORRECnON 

Division of Prisons, 490 FR 

CRIME CONTROL AND PUBLIC SAFETY 

Alcohol Law Enforcement, 47 PR 

CI I rURAL RESOURCES 

Di\ision of /Archives and History, 691 PR 

ELECTIONS 

State Board of Flections, 120 PR 



XECUTLV E ORDERS 






Executive Orders 68 - 


71, 1 


FO 




72, 119 


EO 




73, 146 


EO 


74 - 


75, 508 


EO 


76 - 


77, 594 


EO 



FINAL DECISION LETIERS 

Votmc Ridits Act, 5 FDL, 26 FDL, 185 FDL, 267 FDL, 295 FDL, 370 FDL, 
401 I-DL, 511 FDL, 597 FDL, 608 FDL, 688 FDL 

GENERAL STATUTES 

Chapter 7A, 348 GS 
Chapter 143B, 350 GS 
Chapter 150B, 352 GS 

HUMAN RESOl RCES 

Division of Aging, 229 PR 

Drug Commission, 113 FR 

Facility Ser\ices, 455 PR, 524 PR, 614 PR 

Health Ser\ices, 7 PR, 220 PR, 296 PR, 616 PR 

Medical Assistance, 7 PR, 30 PR, 109 PR, 121 PR, 237 PR, 303 PR, 461 PR 

Mental Health: General, 457 PR, 530 PR, 

Mental Heahh: Hospitals, 459 PR 

Mental Health: Mental Retardation and Substance Abuse Services, 629 PR 



726 NOR TH CAROLINA REGIS TER 



CUMULA TIVE INDEX 



Mental Health: Other Programs, 530 PR, 
Office of the Secretary, 31 PR 
Social Ser\ices Commission, 27 PR, 531 PR 
Vocational Rehabilitation Services, 371 PR 

rsDEPENDENT AGENCIES 

Housing Finance, 21 PR, 134 PR, 255 PR, 518 PR 

ESSLRANCE 

Agent Ser\'ices Division, 238 PR, 636 PR 

Company Operations Division, 470 PR 

Consumer Services, 691 PR 

Fire and Casualty Division, 32 PR, 461 PR 

Fire and Rescue Services Division, 122 PR, 149 PR 

Life: Accident and Health Division, 534 PR 

JUSTICE 

Criminal Justice Education and Training Standards, 304 PR 
Private Protective Services, 303 PR 

LABOR 

Boiler and Pressure Vessel, 598 PR 

Elevator and /Vmusement Device Division, 599 PR 

Notice, 607 C 

Office of Occupational Safety and Health, 598 PR 

LICENSING BOARDS 

Cosmetic /\rt Exammers, 283 PR, 473 PR 

CPA, 73 PR, 472 PR 

Dental Examiners, 704 PR 

Examiners of Electrical Contractors, 151 PR 

Hearing Aid Dealers, 77 FR 

Nursing, 376 PR, 477 PR, 704 PR 

Podiatry Examiners, 377 PR 

LIST OE RULES AFFECTED 

April 1, 1988, 102 LRA 
May 1, 1988, 137 LRA 
June 1, 1988, 260 LRA 
July 1, 1988, 335 LRA 
August 1, 1988, 496 LRA 
September 1, 1988, 585 LRA 
October 1, 1988, 675 LRA 

NATURAL RESOURCES AND COMMUNITY DEVELOPMENT 

Coastal Management, 11 PR, 67 PR, 254 PR, 281 PR, 703 PR 
Community Assistance, 69 PR, 555 PR 
Division of Economic Opportunity, 556 PR 

Environmental Management, 241 PR, 278 PR, 599 PR, 656 PR, 698 PR 
Forest Resources, 68 PR 
Marine Fisheries, 62 PR 
Soil and Water Conservation, 111 PR 

Wildlife Resources and Water Safety, 111 PR, 282 PR, 470 PR, 513 PR, 555 PR, 
599 PR, 656 PR 

REVENUE 

Individual Income Tax, 710 FR 
License and Excise Tax, 1 13 FR 
Motor Fuels Tax, 258 FR 



NOR TH CAROLINA REGIS TER 72 7 



CUMULA TIVE INDEX 



Sales and Use Taxes, 386 FR, 584 FR 

SFXRETARY OF SI ATE 

Securities Division, 125 PR, 656 PR 

STATE PERSONNEL 

State Personnel Commission, 135 PR, 333 PR, 559 PR 

STATE IREASL RER 

Escheats and Abandoned Property, 328 PR 
Local Government Commission, 18 PR 
Retirement Systems, 513 PR 

STATEMENTS OF ORGANIZATION 

Statements of Organization, 403 SO 

TRANSPORTATION 

Division of Highwavs, 719 FR 

Division of Motor Vehicles, 172 FR, 258 FR, 720 FR 



728 NOR TH CA ROLINA REGIS TER 



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New 
Subscription* 


Total 
Quantity Price 


1 - 52 


FuU Code 

1 

2 

2 

3 

4 

4 

5 

5 

6 

7 

8 

9 

10 

10 

10 

10 
10 
10 

10 
10 
10 
10 
10 
10 
10 
10 
10 
10 

11 


1 - 37 
1 - 24 
25- 52 
1 -4 
1 - 2 

3- 17 
1 -2 
3-4 

1 -4 
1 - 11 
1 - 9 
1 -4 
1 -2 
3A-3K 
3L- 3R 

3S- 3U 

4- 6 

7 

8- 9 

10 

11-14 

15- 17 

18 

19-30 

31 -33 

34-41 

42 

43- 50 

1 - 15 


AH titles $750.00 
Administration 90.00 
Agriculture 75.00 
Agriculture 75.00 
Auditor 10.00 
Commerce (includes ABC) 45.00 
Commerce 90.00 
Corrections 60.00 
Corrections 30.00 
Council of State 

Cultural Resources 60.00 
Elections 10.00 
Governor 45.00 
Human Resources 30.00 
Human Resources 90.00 
Human Resources 

(includes CON) 45.00 
Human Resources 30.00 
Human Resources 30.00 
Human Resources 

(includes Breathali/er) 30.00 
Human Resources 60.00 
Human Resources 90.00 
Human Resources 60.00 
Human Resources 45.00 
Human Resources 75.00 
Human Resources 90.00 
Human Resources 30.00 
Human Resources 60.00 
Human Resources 45.00 
Human Resources 90.00 
Insurance 90.00 




1 




2 




3 




4 




5 




6 




7 




8 




9 




10 




11 




12 




13 




14 




15 




16 




17 




18 




19 




20 




21 




22 




23 




24 




25 




26 




27 




28 






Continued 



\'oliimc 


Title 


Chapter 


Subject 


New 
Subscription* 


Quantity 


Total 
Price 


29 


12 
13 

13 
13 
14A 

15 
15 
15 
15 
15 
15 
16 
17 
17 
18 
19 
20 
21 
21 
21 
22 
23 
24 
25 
26 


1 - 12 
1 - 6 
7 

8- 15 
1 - 11 

1 - 2 
3-6 
7 

8- 9 
10 

11-22 
1 - 6 
1 - 6 
7- 11 
1 - 7 
1 - 6 
1 - 9 
1 - 16 
17-37 
38-70 
1 - 2 
1 - 2 
1 
1 
1 -4 


Justice 

Labor 

OSHA 

Labor 

Crime Control and 

Public Safety 

NRCD (includes EMC) 

NRCD 

Coastal Management 

NRCD 

WUdlife 

NRCD 

Lducation 

Revenue 

Revenue 

Secretary of State 

Transportation 

Treasurer 

Licensing Boards 

Licensing Boards 

Licensing Boards 

Administrative Procedures 

Community Colleges 

Housing Finance 

State Personnel 

Administrative Hearings 


90.00 
30.00 
45.00 
45.00 

45.00 
90.00 
45.00 
45.00 
30.00 
45.00 
60.00 
30.00 
75.00 
60.00 
30.00 
90.00 
45.00 
75.00 
75.00 

75.00 
10.00 
10.00 
60.00 
10.00 

Total 






30 






31 






32 






33 






34 






35 






36 






37 






38 






39 






40 






41 






42 






43 






44 






45 






46 






47 






48 






49 






50 






51 






52 













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